The Keith Mitchell-led New National Party (NNP) government has announced plans to implement an aspect of the pension agreement signed in the Memorandum of Understanding (MOU) in February 2018 between the administration and Public Sector Unions and Staff Associations.
According to Chairman of the Pension Engagement Committee (PEC), Caricom Afffairs Minister, Oliver Joseph, government will ensure that public officers who are entitled to pension will go home with nothing less than 70% of their salaries.
Minister Joseph was addressing members of the media at the weekly held post-Cabinet Press Briefing held at the Ministerial Complex against the backdrop of a protracted dispute between the parties on pension and gratuity payments for teachers and civil servants.
The two sides are at loggerheads on government’s latest offer of 8% while the trade unions and staff associations are sticking to their demands for a 25% agreement in keeping with what obtained when the Grenada Constitution was suspended in 1979 with the overthrow of the Eric Gairy government in a coup d’etat by the leftist New Jewel Movement (NJM).
Minister Joseph told reporters that under the MOU signed days before the March 2018 general election, both parties agreed on a pension of 70% for public officers entitled to pension from the state-run National Insurance Scheme (NIS).
He said that NIS offers a paid pension ranging from 30% to a maximum of 60% but government will be topping it up so that public officers will retire with a 70% pension package.
“Let me explain how the 70% will work. If you came in the service after 22nd of February 1985, currently, you’re entitled at age 60 to NIS pension. NIS pension varies from 30% to currently 58% but can reach a maximum of 60%. The formula for calculating NIS pension is on your insurable earnings, that is maximum of $5000.00”, he remarked.
“So, if you made 500 contributions to NIS, you are qualified for 30% and for every 50 contribution thereafter, you get one additional percent up to a maximum of 60%. Bear in mind that government contributes 50% to the employee pension, so when you get the pension, you get your contribution – the 50% that you have been contributing and the 50% government has been contributing and in this new formula government said they will top it up to ensure that no worker goes home with less than 70% and the top up would be based on your last salary – that will take it to the 70%”, he said.
Minister Joseph went on: “The government has taken a decision that since there is no controversy over the 70% and heeding the call of the majority of workers that have retired and only getting the NIS pension, government is moving to implement the 70% of the top up to 70% for all the workers who have retired from the service and workers who would be retiring.”
The senior government minister announced that workers who have already retired from the service will receive the payment retroactively.
He said: “When there is settlement on whatever formula is agreed upon for gratuity payment, these persons would receive it and also for the workers who would have retired from the service, they would be given it retroactively. So, if you retired over the past few years and you only receive the NIS pension, then you would get it retroactively and if there is any adjustment to be made after everything is settled, then you would get the adjustment.
“We think as a government that we have a responsibility to address the concerns of all these hundreds of workers who are retiring with only an NIS Pension, to top it up as we promised that we will do, because almost on a daily basis we hear the concerns of retirees that they are unable to exist on the NIS pension and that is a mechanism of addressing it to ensure as I said that you get 70% as a pension when you retire,” he added.