est. 2007

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Pension Reform for Public Officer a Priority (including Members of Parliament a Priority)

The blogmaster found the comment posted by Critical Analyzer interesting even if provocative. What we can agree is that pension form in the public service- including for members of parliament – must be given a priority. The issue is compounded with the state of the National Insurance Fund that we are left to speculate. Pension…

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The blogmaster found the comment posted by Critical Analyzer interesting even if provocative. What we can agree is that pension form in the public service- including for members of parliament – must be given a priority. The issue is compounded with the state of the National Insurance Fund that we are left to speculate.

Pension Reform as the world tries to do it now is only kicking the can down the road with the warmed over soup gimmicks of every few years increasing the retirement age, changing pension formulas and raising contributions rates while government borrowing from the pension funds for their projects.

Our pension reform needs to completely break the mold

1) For every person currently 50 years or less, change their pension age back tot 65 and have NIS pay an across the board universal basic pension (UBP) calculated based on the cost to cover a one bedroom rental, utilities and food for a single pensioner living alone. Anyone wanting more pension at retirement should seek private pension plans and other investment opportunities during their working years if they desire a higher standard of living.

2) Persons 51 and older would remain under the current arrangements with any shortfalls for the year covered by an unfunded pensions tax. This pension tax would eventually reduce and go away as the numbers under the old arrangement die out.

3) Since healthcare is the biggest money problem for pensioners, work on improving the quality and turnaround time for our taxpayer funded healthcare while bending healthcare costs down through novel approaches e.g. a requirement for medical license renewal could be a minimum amount of pro bono work at government medical facilities or referrals for free outpatient surgical procedures.

Critical Analyzer

177 responses to “Pension Reform for Public Officer a Priority (including Members of Parliament a Priority)”

  1. Vincent Codrington Avatar
    Vincent Codrington

    @ NO at 2:28 PM
    One does not simply cut the size of the Public Service by 25% across the board. We know why the Public Service expanded, If it did. Therefore we must examine the source of previous expansions to satisfy our selves that they are still fit for purpose. If the departments ,SOEs etc have outlived their purpose we should terminate them. We must do this systematically, not whimsically and on the bases of personalities or political connections. Those that can be absorbed elsewhere should be retained.. It is not a number game. It is about efficiency and effectiveness.
    Can you explain to me why in a micro economy, like Barbados we need three Financial Regulatory Institutions.? Can you explain to me, If we have an excess of labour ,why are we seeking to institute capital intensive systems in the name of technological progress? Are all technological solutions an acceptable social objective OR a means to achieving desirable social objectives.
    As Coyote is wont to say:” We are putting the cart before the jackass”.

  2. David Avatar
    David

    @Vincent

    You saw this report.

    —————-

    Prime Minister Committed To Transforming Public Service | GIS

    https://gisbarbados.gov.bb/blog/prime-minister-committed-to-transforming-public-service/

  3. Vincent Codrington Avatar
    Vincent Codrington

    @ David Bu at 9:57 AM

    The short answer is YES. The number of pensioners will decrease through attrition and over time when I last examined the demographics. If all these Publicly sponsored Private sector projects get off the ground the released labour will be absorbed into the private sector at no cost . Their future pensions will be no concern of The Consolidated Fund. So yes it will be sustainable. If you need no policemen,no nurses, the dynamic efficient Private sector will provide these services. Are you getting the drift. But bear in mind, it is not what the noise makers say ,it is what we, the people, want that should exercise the mind of GoB. Talk is the only commodity in Barbados that does not suffer adversely from inflation. It cheap like ( expletive)/.
    The GoB is expeced to put policies in place to ameliorate/ avoid the impact of externalities on the local Economy and Society. Please review their Job Descriptions. It helps when considering local political economic issues.

  4. David Avatar
    David

    @Vincent

    Understand the point you are making, where we separate is that decisions about pension must be informed by actuarial plans.

  5. Vincent Codrington Avatar
    Vincent Codrington

    David Bu

    Bottom line : It cannot be a political decision without the input of the technocrats. We need them.Yes. Pension schemes ,especially publicly administered ones. must be scientifically informed. This is not the age of guessing and trial and error. It is about using knowledge and technology in arriving at decisions in the public arena. NIS had on staff persons pursuing this discipline as well as external actuaries that made a triennial report of the sustainability of the Fund.
    I believe it is this absence of information that leads some commenters to make unfounded statements.
    It cannot simply be a political decision. We need to have the inputs of the technocrats. It is time you stop believing that most public servants are seat warmers.

  6. NorthernObserver Avatar
    NorthernObserver

    @VC
    Leaving it to @Tron, meant I wasn’t supporting/not supporting anything to do with size (that being a matter @Tron frequently puts forth).
    As far as efficiency and effectiveness, I am in no position to determine that.
    Neither do I have the facts to know the size of the public service over time, and those implications going forward.
    For whatever reason “grants to individuals” has increased steadily over time. Will this continue? Are extraneous expenses being funneled through this heading? I have no idea, I don’t have the data set.

  7. Hants Avatar
    Hants

    https://www.caribbeannationalweekly.com/news/caribbean-news/dominica-regains-majority-ownership-of-domlec/#:~:text=The%20Dominica%20government%20says%20it,based%20energy%20company%2C%20Emera%20Incorporated.

  8. David Avatar
    David

    Editorial
    New pensions mindset a must

    Broadly defined as a “periodic” allowance paid to the elderly by the Government or private employers in consideration of past service or age, pensions mean different things to different people in and out of Barbados.
    To tens of thousands of public servants, they are a vital non-contributory guaranteed benefit that’s paid for life after decades of hard work and commitment. They help people in their golden years maintain an acceptable standard of living after their incomes have fallen because of retirement.
    Private sector employees see pensions as proceeds which companies promise to pay on people’s retirement.
    To yet another group, pensions which are calculated as a percentage of salaries earned during working years can be as high as 75 per cent or as low as 33 per cent, and they routinely supplement the National Insurance Scheme’s monthly cheques. They are a financial lifeline which helps to meet mortgage obligations, rents, utility bill payments or service bank loans.
    “The bottom line is that pensions are crucial to helping people meet daily financial commitments,” said Ed Bushell, a human resources expert and a former president of the Barbados Association of Retired Persons.
    That explains why the recent announcement by Prime Minister Mia Amor Mottley, in her Financial Statement And Budgetary Proposals,
    that her administration intends to change the full pension qualification for public officers from 33 and a third years of service to 40 years created such a stir, mostly by trade unionists. Considering that the private sector is expected to follow
    suit by changing its qualifying pension conditions to put it in line with Government reforms, it’s clear that their impact would be felt by not just Government employees.
    General secretary of the National Union of Public Workers, Richard Greene, said they wanted a review of all pension arrangements for the Public Service. He said the announced plans, if implemented, would be unfair, inequitable and disadvantageous to many public workers.
    “Even if you work 40 years, you still get your pension calculated at 33 and a third years, which is the maximum,” he charged. That complaint appears valid, but it requires further study and if proven accurate, there should a correction. At the same time, though, there must be a recognition that the Government’s pension bill must be contained; otherwise, taxpayers will be forced to empty their pocketbooks to finance excessive demands from a Public Service that’s known for its bureaucratic ways and slow and inefficient pace of service.
    The public debate over the Government’s proposed changes underscores the need for a national education programme designed to encourage the development of a different mindset about pensions. The youth, for instance, must start investing early in their own pensions. The Government can facilitate that process through innovative tax reform measures. In essence, a serious overhaul of pensions is required.
    “We need a national educational pension programme,” said Earl Phillips, a Barbadian who is secretary-treasurer of the Transport Workers’ Union, Local 100, and a member of the board of trustees of New York City’s Employees System.
    His suggestion makes eminent sense.

    Source: Nation

  9. Vincent Codrington Avatar
    Vincent Codrington

    This Editorial, like some commentaries posted before,is based on the mistaken notion that pensions are a gift to the retired.employee. It is a condition of employment that attracts the job seeker to a particular employer. It is part of his/her emoluments. This notion is a hangover from the old mendicant attitudes to retired workers.

  10. Donna Avatar
    Donna

    Exactly, Vincent! And conditions of employment cannot be changed unilaterally after hiring.

  11. Vincent Codrington Avatar
    Vincent Codrington

    @ Donna at 1;33 PM

    Correct. There is definitely a need for Civics to be put on the Time Tables in our Secoundary Schools.

  12. David Avatar
    David

    On the subject of civics it seems government’s decision to cap VAT on fuel was interpreted by many as to be a cap on the price of fuel.

  13. Vincent Codrington Avatar
    Vincent Codrington

    @ David BU at 3 :18 PM
    So it would appear. Is the faulty teaching in Civics or Comprehension? I wonder if some commenters are not really deliberately mischievous.

  14. David Avatar
    David

    @Vincent

    Agree this is more about comprehension than civics. Although a health interest in civics may have sharpened the comprehension skills in this regard…LOL

  15. David Avatar
    David

    @Vincent

    Seriously where we are in Barbados is a large majority of people who are happy to breath their fire rage at anything.

  16. NorthernObserver Avatar
    NorthernObserver

    conditions of employment cannot be changed unilaterally after hiring….
    Is this like Bond terms cannot be changed unilaterally after issuance?
    Or taxes cannot be imposed after the tax year is over?
    Or payments to entities owed $$ by GoB must be paid within X time in full, and not converted to Bonds or other longer term Promissory methods?
    The new realities…?

  17. David Avatar
    David

    Discussion about pension reform. Listen to Minister Ryan Straughn talk about unfunded pension.

    https://m.facebook.com/people/National-Union-of-Public-Workers-Barbados/100063838230238/

  18. Bush Tea Avatar
    Bush Tea

    On the subject of civics it seems government’s decision to cap VAT on fuel was interpreted by many as to be a cap on the price of fuel
    ~~~~~~~~~~
    Perhaps our REAL problem is the the damn politicians themselves don’t know what the hell they are doing…
    far less the BB sheeple.

  19. David Avatar
    David

    Straughn: Investment fund to aid pensions
    Pensions in Barbados are mostly unfunded and Government is seeking ways in which public officers, including new staff, will not be disadvantaged, Minister in the Ministry of Finance Ryan Straughn has also made it clear that Government is not seeking to reduce pensions paid to civil servants, but anticipates that, over time, the amount coming from revenue would be reduced.
    His comments came during a public discussion at the Dalkeith, St Michael headquarters of the National Union of Public Workers on pension reform Wednesday, which was streamed online.
    “The Government of Barbados intends to resolve this matter, not just to the satisfaction of all public servants but certainly to ensure that, fiscally, we are in a position to
    ensure that, over time, the actual amount of pensions paid directly from the revenue that you collect in any fiscal year, we are able to reduce that,” Straughn said.
    The minister said Government planned to set up a fund to allow investments to grow. The investment income would support payment of pensions.
    Straugn said he wanted to give the public officers and the existing pensioners the “absolute assurance” that the Government of Barbados was in no way seeking to reduce anyone’s pension.
    He said national consultations and discussions would be continuing with the labour movement and private sector, noting there was a need for public education on pensions. ( HH)


    Source: Nation

  20. Vincent Codrington Avatar
    Vincent Codrington

    @ David Bu

    So we are back to yet another discussion in semantics . I feel your pain.
    You may be correct in your quests.What is surfacing is the abundance of ignorance in matters of Public Affairs ( Res Publicae.). Your work in Education will be rewarded. Continue the good work.
    All things work out for the best. Truth is revealed every day. The paradigm shift is unfurling.
    Now I see the Jonah moment I predicted and the need for it.

  21. David Avatar
    David

    @Vincent

    You took note Minister Straughn refers to unfunded? Meaning we suppose public servants do not contribute?

  22. Vincent Codrington Avatar
    Vincent Codrington

    @ David BU

    Yes . I have.Hence my intervention that followed your upload of a link.

  23. Vincent Codrington Avatar
    Vincent Codrington

    @ David BU at 10 :43 AM

    May I ask who will be funding and managing these segregated funds? Is a portfolio of Public and Private Stocks and shares more sustainable than the revenues/ tax receipts of the Public and private sectors? What is the historical record of the performance of Segregated Funds?

    Thanks for the overseas academic papers. They say nothing different from what I have stated over the last several months. It is a matter of choice and ones appetite for risks and collateral damage. If as you claim,the Surplus funds of NIB is being mismanaged and misused,how much more chaotic will the total collapse of the pension scheme will be.. No portfolio manager has been able to consistently outperform the market.
    AND THIS CANNOT BE REFUTED.

  24. David Avatar
    David

    @Vincent

    The blogmaster will leave that question to others schooled in this matter.

  25. Vincent Codrington Avatar
    Vincent Codrington

    @ David BU
    I think you have just appealed that it is too dark to see the cricket ball. You are dodging. But that is OK.The substantial source is still Tthe Consolidated Fun/ Taxpayers. AND the probability of the Segregated Fund being managed or mismanaged will be higher. The uncertainty / anxieties WILL NOT BE REMOVED. They are the same players in the same game. We are just playing musical chairs with somebodies benefiting from the accompanying chaotic disturbances.

  26. David Avatar
    David

    @Vincent

    The blogmaster quoted the minister. One interpretation is that he is using unfunded in context, we know what he means.

  27. David Avatar
    David

    No kicking pension reform down the road
    There can be no doubt that the management of our economy requires very careful study these days. In fact, it always has required such study. On too many occasions the proverbial can has been kicked down the road.
    We may have reached a point of reckoning. The issue of pensions will not go away. Public Service pensions, in particular, have become a matter of serious comment and concern within recent times. That we have turned to the International Monetary Fund (IMF) for assistance has meant that some elephants in the room have been brought under the glare of that agency’s laser-like focus.
    This country has a small and restricted tax base. We are still struggling to emerge from the yoke of colonialism and the expectations of the people, fed sometimes by the hyperbolic speeches of some social commentators, and some policymakers too, have led some of our people to ignore the harsh reality which faces us.
    Public Service pensions are currently being paid out of yearly revenues. This is clearly unsustainable if we are to stabilise this economy in the short, medium or long term. The problem is compounded by our demographic profile. When former Minister of Education Ronald Jones said that we need more babies, he was speaking an economic truth in plain old Bajan.
    Perhaps we should have been listening more carefully, because whether we see it this way or not, Public Service pensions, indeed pensions generally, are part of the national safety net, required for our vulnerable years of retirement.
    A declining birth rate and an increasing number of retirees living much longer and pensiondependent, are precisely what we face. An inverted triangle that becomes top-heavy with pension retirees
    and cannot be supported on the point of its base by a vastly decreasing workforce.
    We should not require outsiders to tell us that we need pension reform. Nor should the debate be blown off course or become clouded by appeals to the emotion.
    Prime Minister and Minister of Finance Mia Amor Mottley and Minister in the Ministry of Finance Ryan Straughn have both spoken to this issue. The redoubtable Caswell Franklyn has joined the debate. We also notice that more organisations are speaking on issues of retirement planning. A panel discussion on pension reform, its fiscal, social and economic implications, which took place last Wednesday night last at the National Union of Public Workers, explored most of the issues in detail.
    It was crucial to hear Straughn give the assurance that there will be no cut in Public Service pensions, although new recruits entering the service will have to work 40 years in order to get a full one.
    The Inter-American Development Bank a few years ago described this country as having the highest level of Government pensions within the region. This opinion may have led some workers to fear that cuts were planned. The IMF, too, has also called for pension reform.
    The reality is that we cannot avoid pension reform. We have to study the problem and engage with the relevant sectors on how best we may fix the problem. We have to reform the system and protect the economy and workers by producing the optimum mix of policies that will deliver for us a sustainable method of funding public sector pensions.
    The issue is about funding. The pensions debate is necessary and urgent, and it must be informed. Kicking the can will not help. We are at the end of the road.

    Source: Nation Editorial

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