Fri 23rd Jun 2017
The ULP regime has reformed pensions, changing the pension age from 60 years to 65 years over a number of years. This pension reform lacks fairness and should be abolished.
The argument given by the ULP regime is that, to guarantee pensions, the pension age must move from 60 years to 65 years. However, according to Warrant Officer Ivan O’Neal, who has an MSc in Macro-Economics, Budgeting, Planning and Policy from Bradford University, England, this argument is hogwash.
It is the strength of a country’s economy that guarantees pensions. With a strong and vibrant economy, government can invest the pension pot in to strong and vibrant sectors of the economy and get a higher return for the pension pot. This would make the pension pot grow more and guarantee pensions for all.
The problem in SVG is that, the ULP regime’s economic incompetence has seriously weakened the economy, and now it is practically impossible to find an economic sector in SVG, in which to invest the pension pot, that would bring significant returns.
Unemployment is high, most businesses struggle to get sales and virtually no money is circulating the country.
The pension reform is not based on fairness and is a stab in the back to the employees in SVG. Moving the pension age from 60 years to 65 years will lower the quality of life for our people when they retire.
In 2028, if a person retires at 60 years of age and qualifies for a pension of $500 per month at 65 years of age, that person will lose 30% of their pension. That person will receive $500 - $150 = $350. This is outrageous and a significant reduction.
In 2028, if a person retires at 55 years of age and qualifies for a pension of $500 per month at 65 years of age, that person will lose 60% of their pension. That person will receive $500 - $300 = $200. This is also outrageous and a huge reduction.
In 2028, if a person retires at 55 years of age and qualifies for a pension of $300 per month at 65 years of age, that person will lose 60% of their pension. That person will receive $300 - $180 = $120. Water, electricity and food are expensive.What quality of life can a household have on this?
These examples show that the penalties imposed by the ULP regime for early retirement under their pension reform are harsh and unfair.
The ULP regime’s pension reform is even more vicious, when you consider the fact that people have to pay more to receive less. The rate of pension contribution has increased from 8% to 10%, as from 1 January 2014, with employers paying 5.5% and employees paying 4.5%.
Also, at 31 December 2015, the qualifying contribution for pension was 500 weeks, but by 1 January 2028, the contribution will be hugely increased from 500 weeks to 750 weeks. This is a massive price to pay, and in return, be rewarded by a 6% reduction for every year an employee retires before age 65 years.
The ULP regime pension reform is wicked and totally unacceptable and should be abolished. SVG needs a strong economy to guarantee pensions. It is precipitation that brings water, not drought.
Only a Green Government can create a strong and sustainable economy, and hence, guarantee high rates of pension in SVG at age 55 years and 60 years.