Officials from the National Insurance Services (NIS)are holding a series of consultations with stakeholders, as they press ahead with pension reform.
Today, Friday January 27, one such consultation will be held at the NIS building in Kingstown, from 10:00 a.m., to which pensioners and other interested individuals are invited.
Speaking on the issue of pension reform on Tuesday, January 24, NIS executive director, Stewart Haynes said that one of the reform measures could be a possible increase in the contribution rate, for both employers and employees.
“The last actuarial valuation indicated that in the long term, the plan is unsustainable,” Haynes said on NBC radio.
He said the present situation is such that expenditure exceeds income.
“This is a clear indication that there is need for reform,” the executive director added.
At present, the NIS contribution rate is set at 10%, where the employee pays 4.5% and the employer pays the remaining 5.5 %.
Haynes said this increase is necessary to maintain the sustainability of the plan.
He explained that a delay in implementing pension reform could lead to inter-generational inequity, where future workers may have to pay a higher cost.
“We have to make sure the changes to the system are timely, to avoid placing the burden on our children and grandchildren,” he pointed out.
At present, there are more than nine thousand pensioners in St Vincent and the Grenadines, and Haynes said for more than five thousand of them, the NIS is their only source of income.
As such, he sees the NIS as a critical programme for all members of the society.
As it relates to concerns about an increase in the retirement age, Haynes explained that this is calculated based on a scientific approach.
With life expectancy being an important factor, he said “in the medium to short term, we’re not seeing retirement age past 65.”
“I hear people informing me that NIS retirement age going to 70; that’s not true.”
The retirement age was set at 65 in the 2014 pension reform and the executive director is giving the assurance that “it will remain at 65.”
“As far as these reform measures, it is 65 for now.”
He added, “I can’t talk about the future, but I believe 65 based on my personal judgement, would be there for a while.”
In his contribution to the 2023 Budget debate earlier this month, Opposition Leader, Dr Godwin Friday raised concerns about the finances of the NIS.
He had also expressed concerns about the fate of pensioners, for whom the NIS is their only source of income.
Friday spoke in Parliament about the many warnings of former Prime Minister, Arnhim Eustace about the need to keep the NIS on a stable footing.