Transformation Unit Head Urges Pension Reform

KINGSTON — Chief Executive Officer (CEO) of the Public Sector Transformation Unit (PSTU) in the Office of the Prime Minister (OPM), Patricia Sinclair-McCalla, says there is need to reform the public sector pension scheme.

She stated that the pension facility, in its current non-contributory format, is unsustainable.

Speaking on the final day of the Public Sector Monitoring Committee's (PSMC) two-day seminar at the Jamaica Conference Centre, downtown Kingston, on Wednesday September 7, Mrs. Sinclair-McCalla, said there is a "serious problem" facing the administration in fulfilling payment obligations over the next 5-10 years, based on “present value".

She explained that there are over 5,137 civil servants retiring now, and the initial lump sum payment due to them is some $4.8 billion, on average. She pointed out that there will also be an annual recurrent payment of $1.1 billion.

There are 10,520 civil servants, aged 55-60 years old, who are due to retire within the next five years, and their lump sum payment could cost as much as $14.2 billion, with recurrent/annual payments of $3.4 billion. And, in another 10 years, over 12,800 persons aged 50-55 years will have to be paid some $13 billion in lump sum entitlements, and $3.1 billion in recurrent expenditure.

Mrs. Sinclair-McCalla said that her unit has met with several public sector employees, who have indicated their support for a contributory pension scheme.

"They are not opposed to paying an additional one, or even two per cent, and to have a contributory scheme," she stated.

Responding to questions on the level of consultations on the pension payments, Mrs. Sinclair-McCalla advised that Minister with responsibility for the Public Service, Senator Arthur Williams, has engaged representatives and delegates of the various trade unions in the public sector on the matter. 

Senior Industrial Relations Advisor in the Public Service Establishment Division (PSED) of the Office of the Cabinet, Wayne Jones, said that two trade union representatives were members of a special working group involved in a World Bank-supported activity, leading to the formulation of a Public Sector Pension Reform Green Paper, to be tabled in the House of Representatives by Finance Minister, Hon. Audley Shaw.      

Senator Williams, who also spoke at the seminar, said that he will be chairing a Joint Select Committee of both Houses of Parliament which will review of the Green Paper. He said that the Committee will invite submissions from the public, which will also be considered, and a White Paper is expected to be tabled by January.

The seminar was held by the Public Sector Monitoring Committee (PSMC), as part of Government’s efforts to work with the trade unions representing public sector workers to arrive at consensus on setting the parameters for public sector wages and conditions of employment.

Participants in the two-day seminar, held under the theme "A partnership Approach to True Solutions", included members of the PSMC, Permanent Secretaries and heads of agencies, public sector employees and representatives of the private sector.

Topics discussed included the IMF Standby Agreement Conditionalities and the way forward, Growth Inducement in the Medium Term, Social Partnership to Achieve National Objectives, Public Sector Transformation and Productivity in the Public Sector.

By Douglas Mcintosh, JIS Reporter