By Kenton X. Chance
The head of one of the nation’s largest trade unions says the trade union movement fell asleep a few years ago when the government made changes to the age at which persons can begin collecting social security pensions.
Effective Jan. 1, 2014, the state-owned National Insurance Services (NIS) began parametric reforms which will see the pension age gradually increase from 60 to 65, over a 15 year period as follows.
Persons who retired before December 2015 will receive their pension when they are aged 60, while those retiring from Jan. 1, 2020 onward will have to wait until they are 65.
“I’m being frank, I don’t know where the unions were when that took place,” Elroy Boucher, president of the Public Service Union told a press conference in Kingstown on Tuesday.
“Frankly speaking, I really don’t. And, in looking at it now, we would have fallen asleep somewhere.”
He said he has heard teachers also complain that some of them have to wait nine years after they retire before they can get their NIS pension.
“Nine years. Something has to be fundamentally wrong. I can understand you changing the contribution rate or the accrual rate. But, in the midst of you having an understanding that you retire at 60 and you have already planned your retirement to the extent that there is a shortfall, you don’t have the same salary, NIS is 60 per cent if you [did] the maximum. So you are reorganising yourself to meet this new arrangement.
“And three years down the road, you are being told you have to wait another two, three years, it just can’t be wise,” Boucher said.
Boucher said that public officers who are pensionable have a cushion because as soon as they retire they get their pensions.
“So, before the NIS kicks in, at least they have something but those persons who are not pensionable, somebody has to look out for [them].”
Boucher was asked to comment on pension reform in St. Vincent and the Grenadines in light of the widely held view that the two pensions given to public service workers — one from the NIS and the other, a non-contributory one from the Consolidated Fund — is unsustainable.
“We agree that it is unsustainable… I think the politicians have made the argument quite successfully. Currently, the two pensions, when they kick in together, I would also agree that we need some reduction because the percentages are way above what is recommended,” he said.
Boucher said that the Organisation of Eastern Caribbean States pension reform commission recommended no less than 80 per cent at retirement.
“Currently, it is beyond that. So, to be fair in that regard, that needs to be adjusted,” Boucher said.
He, however, pointed out that when one looks at the merger of the two pensions, the same commission, which was authorized by the ECCB Monetary Council, recommended that there should always be the public service pension in addition to the social security pension.
“And those who are in the private sector, you should have the private sector pension — whatever that arrangement is — along with the NIS pension,” Boucher said.
He said workers are looking at a situation where no one entity can afford to give retirees a pension that allows them to live comfortably
“And, therefore, when you combine both — public sector-NIS, private-NIS — you should be able to be comfortable. So, we are definitely opposed to this idea of one pension.”
He said the government’s recommendation is that public service workers contribute to their public service pension.
“That’s a discussion we can have. I know that is the way Jamaica is going, but those things have to be negotiated…. We have to have the discussions. We are on the same page in agreeing on the need for reform. There will be differences but I expect that the government would dialogue with the unions and ultimately negotiate where we can get a good package for public officers that will not leave persons bordering on the poverty line.”
Boucher said that the commission stated that government must always strive to keep the elderly out of poverty.
“But the elderly are the retirees. After having worked 30-plus years, you expect to enjoy whatever years God gives you to remain on the earth in comfort; not struggling,” he said.