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Saturday, May 21, 2022

Unsustainable! Pension scheme fix may take two years

Unsustainable! Pension scheme fix may take two years

Premier Andrew Fahie has announced that his government is working on a comprehensive pension plan to reform the pension system for the territory’s public servants.

While describing the current system as unsustainable, Premier Fahie stated at a recent press briefing that an initial meeting was held on February 14 to discuss a way forward with that initiative.

According to the Premier, the goal is to make it a contributory pension scheme, thereby removing the contingent liability from the government and allowing for a system that will have greater flexibility for public officers on their retirement options.

“Government cannot continue to fund the pension fund outright like that. It will be unsustainable … So, we will all be contributing to the scheme. You will be hearing more about this initiative soon,” the Premier said.

The Premier further indicated that both the National Health Insurance (NHI) scheme as well as the public service pension scheme were likely to come under the microscope for reform.

The territory’s leader further explained that the issue was not a quick fix and will take some time to be rectified.

“That may take within a year and a half to two to complete but the process has to be started now,” he expressed.

Fahie noted that current projections place the territory in a deficit by 2029 in the absence of a reformed pension scheme for the public service.

“If nothing is done that will become a deficit for the government. So, the government has to make some decisions whether now or later but you can’t afford to kick this can down the road any further. You have to do it in the best interest of the people,” he added.

Priority issue that COVID forced to take a backseat

While admitting that the issue is a high priority for his government, Premier Fahie further noted that it had taken a back seat for some time.

“The pension scheme was one of the areas that we had as high priority when we came in [office]. Like everything else, it took a little backseat with COVID because you were just living and breathing on how to deal with COVID. We didn’t know what it was about, we were concerned,” he said.

He continued: “The initial projections from our health team showed that you could go as much as 3,500 deaths if we didn’t put measures in place, so it shifted our attention from for about 25 to 26 months off of a lot of what we wanted to do. It’s not an excuse. It was just a fact. The whole world had to do that.”


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