Pension headaches

We are told by the experts that the actuarial health of the National Insurance Services (NIS) will decline if the pensionable age is not pushed up to 65. This may be so, for a host of reasons – persons are living longer, workforce expansion is not as robust as required, investment returns for risk are not fantastic.

We read in SEARCHLIGHT two weeks ago, about the woes of Winston Boyea – a retired VINLEC operator. As bad as it seems, Mr. Boyea is still better off than a lot of 60-somethings, who don’t have the additional benefit of a private pension. I am not diminishing Boyea’s angst at all. I wish that he had the opportunity to continue working until he was 63. I wish him well.

Pension Life – a struggle for the retired worker

Other than what the NIS will provide, most of our current working population (non-government) will not enjoy the benefit of a pension.

The hope is that they will be employed at their last workplace, up until 65. However, many will not have the opportunity to work until the full NIS pension kicks in – soon to be at the age of 65.
Many of us are not getting an NIS pension of more than, say $1,000 – 1,200 per month. Unless there is another source of income, we will continue to live at or close to the poverty line. Imagine for instance, House bills – $300 minimum; Food – $500; Medical bills – $150 minimum; Transport – $150; Clothing & Sundry – $150; Miscellaneous – no funds. If you are renting, you are in dire straits. Hopefully, there is no more mortgage to pay.

While we struggle, the case of the retired public servant seems vastly different.

Pension Life – better for the Public Servant

I find it appalling that the public servant is allowed to earn more when he or she has retired, than when employed. This is crazy. How could you earn, say $3,500, the month before retirement, and then get more than $4,000 when you retire and no longer working? To make things worse (or better), you would pay no taxes on your post-retirement earning. And to figure that this public servant was not contributing at all to the government component of his pension, while he was working!

The public servant goes to work Monday to Friday – no late hours likely, as is the case of the supermarket cashier or the van driver, the restaurant or hotel worker. I am not challenging the quality of the public servant’s daily output for five days a week, but the government treats him like an honoured member of the kingdom, while many on the outside have to struggle. The public servant has job tenure. It is difficult to remove him or her from office. Then he gets annual increments/increases, whether he deserves them or not. These increases are independent of their raise in salary. And then guess what?

On top of all that, there are some who still get commissions (extra earnings) for bringing in the revenue to government coffers – e.g. customs officers. It doesn’t end here. We are told that some public servants can work beyond the normal retirement age, at the discretion of the One at The Top – invariably, it is he who decides, even if someone else recommends.

Despite getting a pension of more than 120% of their last salary, the government still provides the retiree with increases periodically, to help “cope” with inflationary pressures. The vast majority of the retired working class get no such thing. Yet, we hear of the huge public service bill – a cost that all of us have to bear.

Pension Life – making it post-colonial

Not only is this a vestige of the old colonial public service, but things have gotten worse. Prime Minister Gonsalves has to do something about this to convince us that we are genuinely embracing a post-colonial system of government and economy.

We have heard Sir James Mitchell speak to this issue. Repeatedly, Dr Gonsalves has also spoken about it and has referred to it as a constitutional headache.

My view is that the government must sit down with all stakeholders on this matter. If a constitutional amendment is required, so be it.

We can’t keep thinking about the votes that we may lose or for that matter, get. It may very well take a generation before we feel the full effect of the change to be made.

We have to start now.

A Solution for the non-government worker

We should initiate a national programme of post-retirement planning.

This programme should relate to education on savings and investment planning. Most importantly, it has to focus on the matter of housing – how do we get a worker under the age of 35, settled into an abode that he could call his own. No one should be thinking of still having a mortgage to pay at the age of retirement. That process should begin at least 20 – 25 years before you call it a day at the workplace. To facilitate all of this, it is time that we begin thinking of building three- or four storey apartment complexes which would make it more affordable for all to deal with housing costs and to minimize the pension headache 30 years later.