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The three main public sector unions in St. Vincent and the Grenadines are rejecting the government’s proposal that pension age be increased from 65 to 67.

They, however, agree with the recommendation that the contribution rate be increased from 10 to 15% to shore up the state-managed pensions agency, the National Insurance Services (NIS).

The reserves of the NIS are projected to be depleted by 2034, if reform is not undertaken, the 11th actuarial review, which covered the years 2017 to 2019 has found, even as the 12th actuarial review — to cover the years 2020 to 2022 — is now due.

The Public Service Union, SVG Teachers’ Union and the Police Welfare Association have also recommended that pensions be increased, noting that there have been no adjustments for 12 years, during which time inflation has risen 22.18%.

The government is expected to announce in the Budget Address on Monday its decisions regarding pension reform.

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Among the changes the government has suggested is increasing the pension age from 65 to 67 and moving the contribution rate to at least 15% — up from 10% — progressively.

However, the unions said this week that there is no data to support the argument that Vincentians are living longer and, therefore, the pension age should be increased.

“The pension age should not increase. Let current or very recent survey data for SVG be provided to support the assertion that people are living significantly longer,” the union said in a document summarising its recommendation to the government on pension reform.

Elroy Boucher, president of the PSU, elaborated on this during a joint press conference with the Teachers’ Union this week.

He said he has seen “some regional and international documents” that indicate that life expectancy in SVG is about 69 years. 

“So, we’re basically saying we’re not in any agreement for the retirement age to be increased to 67,” Boucher said.

“There’s really no evidence to point that people are living to 72 and 75 in the majority. There is no evidence that we have seen that that is the case. And so, we cannot support the retirement age going to 67,” he said. 

The union said that if the contribution rate is to be increased by 5 percentage points, this should be split evenly between employee and employee over a period of time. 

“… it is recommended that there be a 0.25% or 0.5% increase for both employee and employer in 2024, and a similar increase each year that follows, until 15% is reached or,” the unions said.

Alternatively, if the increase is 2.25% for the employee and 2.75% for the employer, then it is recommended that there be a 0.25% or 0.5% increase for both employee and employer in 2024, and a similar increase each year that follows until 15% is reached. 

“This is to ease the burden of reduced disposable income on the contributor, especially during a time when the cost of living is high,” the union said in its document. 

Boucher said that the unions understand the situation and agree that the problem with the NIS must be corrected.

“And so, we agree that the contribution rate should be increased to 15% at a minimum. And interestingly, this only speaks to a short-term fix, because what is required to fix it is beyond 15% over the long-term period. 

“But currently, workers cannot afford it. In our own deliberations, in our own investigation workers cannot afford anything beyond this,” he said. 

The unions noted that NIS pensioners last received a pension increase in 2014, when pensions were adjusted based on the year they were awarded.

People whose pensions were awarded in 2010 received a 1.5% increase, those in 2009 a 3% increase and those during or before 2008 were granted an increase of 4.5%.

“The pensioners whose pensions were awarded in 2011 and onwards have seen no increase in their pensions over a 12-year period from 2012 to present,” the union noted.

“So, while government workers have been getting increases, the NIS pensioners have not been getting,’ Boucher said.

The unions pointed out that those who last received an increase in 2014 have not had any pension adjustments in nine years.

At the same time, the accumulated inflation rate over the 12-year period from 2012-2023 is approximately 22.18%. 

The accumulated inflation over the nine-year period 2015-2023 is approximately 19.77%. 

“Pensioners spending power has been severely impacted by the high cost of goods and services over the aforementioned 12 and 9-year period, respectively,” the unions said. 

They are recommending that pensioners be granted increases based on the year their pension was awarded, 10% for those granted between Jan. 1, 2011 and Dec. 31, 2013 and 5% for those granted after Jan. 1, 2014.

The unions said the government had not responded to these and other recommendations for pension reform that it made to the government on Nov. 16, 2023.

One reply on “Unions say no to 67 as pension age; support 15% contribution rate ”

  1. The unions should take some action that’s similar to when the Government introduced the bills in the 80s. Flex your muscles and fight to the end until your voices are heard. I belong to a member of a trade unionist family.

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