EDITOR: I wanted to follow up my article on this subject which appeared in the newspapers last week by addressing what I think to be one of the most urgent matters for resolution by way of pension reform – the non-alignment of retirement age with NIS pension age. This issue has been causing serious socio-economic havoc in our society and I was happy to hear the NIS executive director Mr. Stewart Haynes express the determination to address it in a presentation he made to the media on 20th November 2022.
We first of all need to have an appreciation of the difference between the retirement age and the pension age. The retirement age is the age at which an individual comes to the end of his or her course of employment with a particular employer. For example, the retirement age of Coreas Hazells Inc. is 65. The retirement age of VINLEC is 60. The retirement age of public servants is also 60 (it used to be 55). The retirement age is separate and distinct from the NIS pension age – the age at which an individual becomes entitled to receive a pension from the NIS.
The typical retirement age in SVG is 60 whereas the typical NIS pension age is 65. This creates the problem of a retiree having no access to pension. This problem is particularly acute in St. Vincent and the Grenadines where the NIS pension is the only source of income for 85% of its pensioners (Source: NIS Report). This means that if a person retires at 60 and only becomes eligible for pension at 65 he or she would in all likelihood have to endure a period of five years with no income whatsoever and corresponding hardship.
The impact of this harsh state of affairs is softened somewhat by the possibility in the case of public servants of incremental one-year extensions of the contract of employment after the attainment of the retirement age, and the possibility of early access to pension. However, extensions of the contract of employment are at the whims of an employer and early access to pension comes at the cost of discounted benefits.
This precise issue was the basis of the plight of Mr. Winston Boyea of Bay Hill that was covered by the Searchlight newspaper on 7th October, 2022. In his case, the retirement age was 60 and the pensionable age was 65.
Mr. Boyea’s condition was compounded by the fact that as a former employee of VINLEC he was caught up in the BAICO/CLICO financial disaster which caused him to lose pension benefits. He was compelled by his circumstances to take early reduced NIS Pension. This was his reward for many years of sterling and dedicated service to St. Vincent Electricity Ltd. and by extension the nation.
Unfortunately, there are many other Vincentians who have suffered or are suffering from the non-alignment of the retirement age with the pension age.
I think the NIS should lead the initiative to bring about a harmonisation of the retirement age and the pension age by advocating for legislative change and other actions, as necessary. This will go a long way towards reducing hardship, uncertainty and financial insecurity in this country.
R. T. Luke V. Browne