REGIONAL: Pension age in Barbados moves to 68

The government of Barbados has announced that they will increase the pension age to 68 in a couple of years.

During his ministerial statement on the revitalisation of the National Insurance Scheme (NIS) last Friday, Minister of Labour, Social Security and The Third Sector, Colin Jordan announced several social security measures. This included raising the pensionable age of the NIS amid the island’s aged population.

Minister Jordan recommended a one-year rise of the pensionable age in two increments. In 2028, the pensionable age will become 67.5 years and in 2034, the age will rise to 68 years.

“Mr Speaker, the public was clear that, while changes would have to be made, there was no desire to have 70 years as the pensionable age, and we have done our utmost to honour that desire,” indicated the Minister of Social Security.

Jordan went out to announce that from 2025, the first age to qualify for reduced pension will be 61 years. In 2028, it will become 62 years and in 2031, it will be 63 years.

He noted that the population of Barbados was declining and the average life expectancy which currently stands at 78 years is expected to continue to increase.

“These two trends mean that we are simultaneously suffering a reduction in the contributor base – the number of people who are paying National Insurance – whilst paying out more in benefits to the increasing number of pensioners,” Jordan added.

He emphasised that the National Insurance Fund was pressured and could possibly experience severe strain within the next decade.

“The National Insurance Fund is strong with assets of approximately $4 billion with average yields on investments of 4.3 per cent. Even though the Fund is not in crisis now, we know that we have a date with destiny between 2034 and 2041,” the Minister remarked.

Jordan also disclosed the number of contributions required for persons to be eligible for pension will increase from 500 weeks to 750 weeks.

“It is understood that, with most persons starting to work by their early to mid- twenties, the requirement for contributing to the National Insurance Scheme for at least 15 years is entirely reasonable and brings us into line with international benchmarks.

In this transition, however, we are making sure that persons who are already sixty years old, or will be sixty years or older by January 1, 2024 will not be affected.”

He went out to reveal that there will be an amendment to the wages used to calculate pension benefits to prohibit persons abusing the system. The system will change from a maximum of five years or ‘Best five year’ to a maximum of 10 years of contributions.

“Many persons were opposed to what is considered an abuse of the system, where some persons contribute at the maximum for five years then stop, and are still able to enjoy the maximum pension. Going forward the basis for calculating pension will be the best ten years.

“There will be an aggressive approach to encouraging and enforcing compliance with the legislation governing the National Insurance Scheme. Officers from the Compliance Unit will be in the field, and the Office will use all measures at its disposal to ensure the law is adhered to, including using garnishments or the Law Courts,” he added.

SOURCE: Loop News Barbados