PM insists pension reform a necessity

Pension reform for the public sector is needed to stabilise one of Barbados’ most important social security schemes.

This message was shared by Prime Minister Mia Mottley as she spoke to constituents of St John on Tuesday, during the monthly Parish Speaks series during which she addressed concerns about the pending pension reform.

She said the current framework for public service pensions was not sustainable in the long run.

“We not only have problems with public service pensions, we have problems with pensions overall,” Mottley stated. “If we don’t deal with it, [people] will be in trouble when they come to retire.

“[Errol] Barrow was the first person to deal with the fact that people used to get two pensions, and he stopped it in the 1970s. Tom [Adams] also made some adjustments and then Owen [Arthur] made some adjustments. Regrettably, I have to make some too, and we are doing it not because we don’t like people but we are trying to make sure that at the end of the day, if we say to you that if you do ‘X’ you are going to draw ‘Y’, you must be able to do it. That is what brings stability to a social security scheme,” she added.

One controversial aspect of the proposed reform is that new employees in the public sector will have to contribute 40 years of service to qualify for a maximum pension.

The Prime Minister said government expenditure on pensions continues to steadily increase annually, and given that Barbadians continue to live longer, in addition to a reduced number of younger persons entering the workforce, the issue needed to be addressed.

“I can tell you, without fear of contradiction, that public government pensions have been one of the largest growing items of expenditure in Barbados in the last 25 years…. but guess what? People are living longer, people are working longer and harder, so that whereas before you might have expected somebody not to live past 70, for the most part, people are living easily into their 80s and working longer and working better,” she said.

Mottley noted that migration and population growth must also be looked at, given the low population growth Barbados has seen in the last several years.
(SB)