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UNION’S FURY

by Emmanuel Joseph
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Pension reforms: Future generations at risk, says CTUSAB 

By Emmanuel Joseph

The island’s umbrella trade union body has launched a scathing attack on the government’s proposed pension reform policy, urging the Mottley administration to urgently revisit the measures which, in their present form, could threaten the livelihoods of future generations.

The Congress of Trade Unions and Staff Associations of Barbados (CTUSAB) is crying foul of the government’s actions and calls for the immediate convening of a series of meetings of the Social Partnership to discuss revisiting the planned changes to the National Insurance Fund.

The National Insurance and Social Security (Amendment) Bill, which was passed in the House of Assembly last Friday and is now before the Senate, proposes that the pensionable age will be raised from 67 to 68, and the number of required contributions to receive pension benefits increase from 500 to 750. Social Security Minister Colin Jordan sought to justify these measures as essential to prevent the depletion of the National Insurance Fund, given the projected challenges posed by the island’s ageing population, with the fund projected to “dry up” by 2041.

But the General Secretary of CTUSAB, Dennis DePeiza, said on Friday that the source of the problem is the government’s handling of the fund.

“CTUSAB believes that the source of the problem with the NIS Fund resides in the management of it, along with the excessive borrowing from the fund by the government to finance its fiscal and capital works programmes. This is in addition to the utilising of funds, for purposes for which it was not designed,” DePeiza said in a strongly-worded statement.

He added: “Working-class people and indeed all Barbadians are urged to let their voices be heard on these draconian measures, inasmuch as they were raised when the proposed change to Independence Day was being thrust upon the people by the government. CTUSAB is of the opinion that the proposed NIS Reforms are unacceptable and must be revisited.”

CTUSAB “strongly” disagrees with the increase in the number of contributions required to become eligible for a pension, which has moved from 500 weeks, about 10 years, to 750 weeks, or 15 years.

The General Secretary said the Congress “outrightly” objects to the government’s contention that the increase in life expectancy to 78 years and moving upward is a major cause for adjustments to be made to the Fund.

“The Congress contends that the change of the pensionable age from 67 to 67½ years in 2028, and then to 68 years in 2034 is unwarranted, as this can certainly undermine national productivity and could be the catalyst for the deterioration of the health and well-being of those seniors in the workforce,” he cautioned.

“Moreover,” DePeiza said, “the extended age of retirement will run counterproductive to young workers being able to secure jobs at an early age, and can challenge some in qualifying to receive a reduced pension when the adjustment from age 61 in 2025, 62 years in 2028, and age 63 years in 2031 becomes effective.”

“Against the backdrop that within the State-Owned Enterprises (SOE’s), the pensionable retirement age continues to be that of 65, CTUSAB further objects to the increase in the pensionable age, on the grounds that employees in the SOEs stand to be disadvantaged, as they are forced to retire at age 65 and consequently, have to accept a reduced pension,” the leader of the umbrella trade union argued.

He said this raises the issue of age discrimination.

“While accepting that current expenditure of the pension fund is greater than its revenue, CTUSAB, however, does not entertain the claim that this is primarily due to the island’s ageing population. The government must shoulder responsibility for not being able to capture contributions from those in the third sector and self-employed persons,” he contended.

DePeiza was adamant that the government should also be aware that its policies are contributing to the downsizing of the workforce and the non-creation of employment opportunities in both the public and private sectors.

He suggested that these combined factors result in the reduction of contributions to the NIS Fund.

The Congress was also harsh on the Mottley administration for its management of debts to the NIS.

“The Congress takes issue with the fact that the government, as the custodian of the assets of the people of Barbados, would allow companies and individuals to run up debts to the NIS. This is nothing short of severe dereliction of duty and makes a mockery of the governance model,” De Peiza stated.

“For the government to engage in the practice of writing off debts owed to the NIS, along with VAT [Value Add Tax] payments due to the Barbados Revenue Authority, is to allow the society to sink deeper into a morass of decadence.

“This brings into question whether the government is really living up to the boast of transparency when it resorts to a policy of writing off monies owed to the state, and where those who fail to keep their commitment and obligations to the state as guided by law, remain the beneficiaries,” he stressed.

The union leader questioned the extent to which those written-off funds could have been invested as a means of lessening the severity of the intended measures to the National Insurance Scheme.

“It would seem that the government has turned a blind eye to safeguarding the interest of the next generation of workers, by ensuring that they cannot benefit significantly from a pension in their senior years. It would also appear that the government is more preoccupied with satisfying its main interest of correcting its actions which have threatened the stability of the Fund,” De Peiza suggested.

He accused the government of being unilateral in its decision to reform the pension programme by not keeping its promise to consult with members of the Social Partnership, following the consultation held with the actuary earlier this year.

“It was, therefore, in poor taste to learn of the government’s imposed changes through a Ministerial Statement which was read by the Minister of Labour, Social Security and the Third Sector, the Honourable Colin Jordan, in the House of Assembly, Friday, 28 July 2023.

“Moreover, CTUSAB is not satisfied that the government has canvassed the Barbadian population widely enough about the proposed measures before the issuance of the Ministerial statement, which essentially means that there can be no meaningful debate.”

CTUSAB contends that the proposed engagement of the populace in an educational campaign “after the fact is nonsense and questions the wisdom of doing so.”

De Peiza added: “Now that the government has embarked on a policy to downsize the public service and to introduce contract employment, with the latter not offering security of tenure to employees, there is every possibility that this can further impact on the intent to stabilize and consolidate the fund.”

He warned that in the absence of job security, the level of sustained employment can present a problem that can help to undermine the stability of the NIS Fund.

The Congress, therefore, said it expects that workers stand to be disadvantaged as they may be constrained in meeting the required NIS payments; and moreover, on reaching the age of eligibility for a pension, could find themselves wanting; having not paid the required contributions.

De Peiza has called on Barbadians to raise their voices on the proposed pension reform.

emmanueljoseph@barbadostoday.bb

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