Senate Begins Debate on Pension Reform Bills

Story Highlights

  • The Senate, on Friday (June 23), started debate on the public-sector pension reform Bills.
  • Minister of Education, Youth and Information, Senator the Hon. Ruel Reid, who piloted the Bills, said the aim is to make the pension system more affordable and sustainable for the Government, while providing adequate benefits for pensioners.
  • Senator Reid said that while the reforms will not completely eliminate the cost to the Government, it will reduce the burden on the Budget.

The Senate, on Friday (June 23), started a debate on the public-sector pension reform Bills.

The Pensions (Public Service) Act 2017 and the Constitution (Amendment) (Establishment Fund) (Payment of Pensions) Act 2017 were passed in the House of Representatives earlier this year, with approximately 38 amendments.

Minister of Education, Youth and Information, Senator the Hon. Ruel Reid, who piloted the Bills, said the aim is to make the pension system more affordable and sustainable for the Government, while providing adequate benefits for pensioners.

He noted that current pension expenditure is estimated at more than $30 billion, and is projected to increase.

“The current public-sector pension arrangement is unsustainable, as only a small portion of public-sector workers make contributions. These contributions are not related to their pension benefit. Consequently, this has serious implications for our public debt,” he pointed out.

Senator Reid said that while the reforms will not completely eliminate the cost to the Government, it will reduce the burden on the Budget.

“It should be noted that the intention of the reform is not a panacea, but the intention is to review the reformed system after a specified period, with the aim to determine if and what other reforms are required as noted in clause 38 of the (Pensions (Public Service) Bill,” he said.Mr. Reid noted that the Government remains committed to further dialogue as it seeks to improve the benefits to workers.

Mr. Reid noted that the Government remains committed to further dialogue as it seeks to improve the benefits to workers.

“The Government is duty-bound to respond to the concerns of especially public-sector employees, and having heard their appeal for help has taken the necessary steps to address their concerns. In this way, we are helping to protect the interests of the hard-working public servants,” he said.

The Pensions (Public Service) Act 2017 will establish a defined benefit contributory scheme, which will require all pensionable officers to contribute five per cent of salary.

It also provides for establishment of a segregated fund for contributions; gradual increase in the retirement age to 65; and harmonisation of legislation regarding public-sector pensions in a single statute, while repealing several enactments previously dealing with pensions.

The Constitution (Amendment) (Established Fund) (Payment of Pensions) Act 2017 seeks to amend the Constitution to provide for the payment of pensions, gratuities and allowances out of the pension fund.

The debate on the Bills was postponed to a date to be announced.

JIS Social