2024 is the deadline for St Vincent’s NIS reform
Stewart Haynes, executive director of National Insurance Services (NIS), indicated on Tuesday that the NIS is now unsustainable in the medium and long term if no reforms are made and that pension reform must be done by 2024 or “draconian measures” may be applied.
Haynes at a consultation with the media on Tuesday spoke to the problems with the Public Service Pension System and stated that the generous pension imposes a financial burden on the government and poses a generational risk for the Fund.
He added that the longer no changes are made, the more drastic the measures to correct the system’s designs will be. He stated that several reform options have been proposed.
“If we combine civil servants under the public service pension system and Social Security benefits that could reach 127%, that person will receive more money in retirement than during their working years. My 12-year-old daughter will pay the price if we do not rectify this situation. The accrual rate is currently 2%; the government can consider reducing it to 1%, but only for future service; our public service pension system’s retirement age can be aligned with Social Security. A mandatory employee contribution could be an alternative method for reducing future pension plan expenses”, Haynes stated.
Haynes told the consultation that St. Vincent and the Grenadine’s 10 percent contribution rate is lower than the regional average of 11.8 percent and stated that it is possible to increase this rate.
He also stated last week that self-employed individuals in SVG may be required to pay National Insurance Service (NIS) contributions if proposed recommendations are implemented.
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