Union knocks late attempts at pension reform
Elroy Boucher, President of the PSU.
September 22, 2023

Union knocks late attempts at pension reform

Head of the Public Service Union (PSU), Elroy Boucher, has knocked the government’s 11th-hour attempts at pension reform, noting that had the reform measures suggested years ago been implemented there would be less financial burden now, especially on civil servants.

The union President was one of two guests on SVGTV’s Viewpoint programme on Sunday, September 17 along with economist and attorney-at-law, Luke Browne.

“The pressure on the workers would have been different. What we are grappling with now in a reform year… is the high cost of living. We just had salary increases which were minimal, small… It is very tough on workers’ pockets to feed their families. Having the reform conversation now, imagine if it was done in 2017, the burden would’ve lessened.”

Coming out of the 11th actuarial review, the most recent analysis of the National Insurance Fund up to 2019, policy options for parametric and administrative reform were put forward which include an increase in contribution rates from ten to fifteen per cent, moving pension age to 67 as well as a reduction in the maximum old age pension replacement rate from 60 per cent to 55 per cent.

Boucher stressed that the unions were in support of reform measures and he knocked the minister of finance for what he called a failure to make available previous actuarial reports.

We as a union, given what we have seen with the report … it is a report that the unions have been asking for since 2018, because the unions took on this pension reform issue about four, five years ago…. We wrote several times to the Minister of Finance and we got no response. All of these documents were hidden until recently when this thing became public information. You want us to engage in reform but we don’t have information, but we don’t have access to it.”

He said in addition to reform measures, there needed to be a greater focus on the administration of the NIS, zoning in on what he called a mismanagement of the Fund and the concerning financial risks.

“When you take the hard-earned funds that workers pay into NIS and you pass a law to pay a non-contributory pension, to pay an elderly assistance pension, the total amount from the time that was started to now is over 55 million dollars. It is a good programme but it is not the responsibility of the NIS. It is a social programme for the government. When you hear in Parliament that my government is adding all these persons onto this programme, we get the impression that the NIS is not owned by the workers, it is owned by another entity.”

The most recent review pointed to the unsustainability of the National Insurance Fund, with the actuary projecting that there would be a depletion of the Fund by 2036 if changes are not made to contribution rates and benefit provisions.

“ The actuary said you need to be very prudent in your investments, in your spending because down the road shortly you might have a problem with liquidation. When you have that sort of cautioning, yet when you look at what has been happening, it runs contrary to the very advice and recommendations made by the actuary.

“You have administrative costs increasing, you have investments in the hotel in Diamond, is that the time for you to make those types of investments?”

“When you add up all of the finances that have been lost by NIS through different outputs, it amounts to over 100 million… of course as a union we embrace reforms but we just cannot have a carte blanche when it comes to that.”