SHAW… the current public sector pension arrangement is unsustainable as only a small portion of public sector workers make contributions
DEBATE started yesterday in the House of Representatives on changes to the Pensions (Public Service) Act (2016) to have all public sector employees contribute to their pension payments, which is now paid for by the Government.
Currently, a small category of public sector workers contribute four per cent to their pension payments under the widows and orphans benefit. The police also make contributions of 1.7 per cent of their basic salaries.
Opening the debate on the Bill — which has made some public servants such as teachers uneasy — Finance Minister Audley Shaw pointed out that the aim of public sector pension reform is to make the system more affordable and sustainable for the Government, while providing adequate benefits. “While the reform will not completely eliminate the cost to Government, it will reduce the burden. The intention of the reform is not a panacea but the intention is to review the reformed system after a specified period with the aim to determine if and what other reforms are required,” he stated.
Shaw stressed that the current public sector pension arrangement is unsustainable as only a small portion of public sector workers make contributions, noting that the cost of pensions has moved from approximately $16 billion to $32 billion. “Over four or five years, we have seen a pretty remarkable increase in the size of pensions as a cost on the national budget,” he remarked.
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