“ Need for reform of pension regulations ”

franklyspeaking

There are about 1 500 pensioners, most of whom are over 70 years of age, who have suffered the loss of a substantial portion of their pensions.   This came about because the Auditor General reported that there were several former employees of statutory boards who were in receipt of full Government pensions, in circumstances where those pensions should have been reduced by the amount of contributory pension they received from the National Insurance Scheme (NIS). In response, without regard to the hardship that would result, Government moved with alacrity to remove the additional pension. Many of those pensioners were receiving the pension for more than ten years. Since then there have been a lot of mostly uninformed comment that has now taken on a political dimension after Miss Mia Mottley, in her Budget Reply, promised to restore the pension to those affected if the Barbados Labour Party is returned to office at the next general election. Despite making a manifesto promise in 2008 to change the law to restore the additional pension that was removed from people entering the Public Service after September 1, 1975, Government defended its decision to deprive those recipients and poured scorn on Miss Mottley’s back-raising proposal. On Page 17 of its 2008 manifesto, the Democratic Labour Party (DLP) promised, under the heading Treasuring Our Seniors In Their Golden Years, to repeal the legislation that discriminated between Government pensioners retiring before 1975 and those after in relation to their Government pension and NIS pension. But how did the situation get to this point? In 1975, Government passed the Pensions (Miscellaneous Provisions) Act, 1975 – 31 which provided that people who entered the service of Government after September 1, 1975, would have their pensions reduced by the amount of contributory pension payable by the NIS. That provision was applied to people who would be entitled to receive pensions under the following statutes: • Pensions Act, Chapter 25 • Public Employees Pensions Act, Chapter 30 • Widows And Children Pensions Act, Chapter 37 • Teachers (Secondary Schools) Pensions Act, Chapter 56 • Statutory Boards (Pensions) Act, Chapter  384. Somehow the Government of that day reasoned that it was equitable to reduce the pensions of people entering the service of Government after September 1, 1975, except parliamentarians, judges and the Governor General.  Incidentally, there was no Barbados Defence Force in 1975 but when Government eventually provided pensions for retired soldiers and officers in 2007, the reduction did not apply to them. Government’s pension schemes make better provisions for those who are more capable of providing for themselves and punish the least well off members of the Public Service. There is urgent need for rationalization of Government’s various pension regulations. It is simply not fair that some categories of Government workers should be entitled to generous retiring benefits while others are reduced to pauperism in retirement. Restoring the pension to ordinary civil servants who entered the Public Service after September 1, 1975, should be the first step in that rationalization. However, there are other areas of legislated snobbery in the provision of Government pensions that beg for reform. For example: • Members of Parliament reduced the age at which they could access their pensions from 55 to 50 years. Having done that, they increased the pension age of public servants to 67 years. • After eight years’ service, MPs are entitled to receive half of their highest salary as a pension; and after 12 years, they qualify for and are entitled to receive two-thirds of their highest salary. This is to be contrasted with public officers who become eligible to receive their retiring benefits under the Pensions Act. They are entitled to receive one-fifth of their salary after ten years; and two-thirds after 33 and one-third years. It is worse in respect of workers who are entitled to receive pensions under the Statutory Boards (Pensions) Act. They are entitled to receive two-thirds after 40 years. Special mention must be made of the Prime Minister, who is entitled to receive a pension of two-thirds of his salary at any time that he demits office at any age. In effect, he does not even have to be Prime Minister for an entire day. • Soldiers were made to wait a long time to have a pension scheme put in place, but in the end they have no basis for complaint. Under the Defence (Pension) Regulations, 2007, a soldier is entitled to receive his pension at age 45 years if he has completed 15 years’ service. If you are choosing a career with an ultimate view to retirement, you now have an idea where to look. • Caswell Franklyn is a trade unionist and social commentator.