Government’s proposed pension reform is not only a significant erosion of public servants’ rights but could jeopardise the health and wellbeing of Barbadians after retirement.
That is the view of Deputy General Secretary of the National Union of Public Workers (NUPW) Wayne Walrond who has vowed to fight to ensure workers are not disadvantaged in their twilight years.
He gave the assurance on Thursday night during a webinar on pensions in the public service, as he criticised the Mia Mottley-led administration for its unsustainable goals.
During her Budget presentation in March, Mottley announced pension reform plans that would, in one instance, see public servants having to contribute 40 years of service to qualify for maximum pension, instead of the current 33 and a third years.
But according to Walrond, Government would merely be creating more social problems by asking employees to work longer to receive the same benefits.
“Workers get two per cent for every year that they work until a maximum of 33 and a third years, which gives two thirds or 66.6 per cent. But . . . I have to put in 40 years, so that brings down the annual rate from two per cent to 1.67 per cent. In other words, where at 33 and a third per cent I could get a maximum pension at two thirds, now I have to work 40 years . . . to get the same 66.6 per cent.
“This will result in persons having to work longer to earn the same maximum pension. It is an erosion of the [workers’] rights, a significant erosion, and we cannot raeally sit down and just say ‘ok’ to this situation. This is something that we really have to discuss,” Walrond insisted.
The trade unionist insisted that the existing pension is a safety net to ensure public officers retire with a level of dignity and above the poverty line.
“We also argue that pensions should not be seen as just an expense or burden to the State but as an investment in return to retiring public officers who served you well, and you are ensuring that they retire with not only a level of dignity but they are able to take care of their health, deal with their social issues….
“If you erase that disposable income that that pensioner has, the spinoff from that is low economic activity and employment; you are also reducing that and you could end up with more social problems because people can’t really take care of themselves…. The health care system is already overburdened with NCDs and we don’t need persons to struggle for themselves and can’t eat properly and take care of themselves,” he said.
Walrond also took issue with Government’s proposal to penalise persons who opted for early retirement.
He said while 62 years was the youngest age a public servant would be able to retire, any person who wished to do so would incur a penalty of six per cent annually.
Walrond said this meant a person who retired at 62 would lose 30 per cent of their pension by the time they reached the retirement age of 67.
“To deter you from vying for early retirement is to put a penalty of six per cent per annum. Certainly, that is a significant erosion of public officers’ public rights.
“Some people retire early because they become ill, they can afford to go off, they don’t want to rely on being medically boarded and just want to make that decision. But you remove that right and penalise them with a penalty of up to 30 per cent because they came in the public service early, probably in their 20s, and by age 62 they put in close to 40 years and you’re going to penalise someone who opts for early retirement?” Walrond questioned.
The NUPW senior official also took issue with Government’s double taxation process.
He said it was not fair that contributions paid to private pension plans and benefits received from payments of contributions be taxed. [email protected]