The Joint Select Committee on Pension Reform has recommended that new civil service employees should begin paying a contribution of five per cent of their earnings towards their pension, as of January 1, 2013.
Minister without Portfolio in the Ministry of Finance and Planning, Horace Dalley, opened the debate on the report from the Committee, in the House of Representatives, on November 6.
It was also recommended that existing public sector workers should begin contributing to their pension in the new fiscal year of 2013/14.
"The Committee was conscious of the fact that it ought to be an Executive decision and that the Cabinet should decide if it is April 1, 2013," Mr. Dalley said.
The Committee also recommended that the Government retains the defined benefit model as it is felt that the “benefits would be adequate and the operations of the new arrangement would be transparent and efficient."
"We are proposing that there be established a segregated fund under Trust, as the cost will be fiscally maintainable. The new arrangement would be secure and the operations of the new arrangements would be transparent and adequate," Mr. Dalley said.
"All employees from the implementation date will contribute five per cent of salary. This will result in the cost being fiscally sustainable (with) more equitable benefits," he added.
It was also recommended by the Committee that the Government continues to contribute $17 billion per annum for 40 years to fund the legacy portion of the liabilities with pensioners who are already on the pension roll.
Mr. Dalley informed that under the new pension scheme an actuarial review would be conducted every three years or earlier if there are any significant changes in the economic environment of the country.
"There is a team working on the implementation and we feel that we will be ready for all new entrants for January 1, 2013 to start to pay into this pension fund,” the Minister said.
The retirement age for all workers will also be raised from 60 to 65 years, except for members of the security forces.
The debate was suspended to facilitate contributions from other members of the House of Representatives. The White Paper on Pension Reform is expected to be tabled in the House of Representatives before the end of November.