By Spokesman Newsroom
BASSETERRE, St. Kitts (Thursday 11th July 2024) – The Director of the St. Christopher and Nevis Social Security Board, Christopher Louard, has mentioned topics of a national retirement pension and raising the pension age as areas for discussion about reform with stakeholders and the public.
“Can we introduce in St. Kitts and Nevis a national retirement age?” and “So is 62 the age? Can we increase that age…? were two questions raised during his appearance on an ‘In Focus’ episodeby the St. Kitts-Nevis Information Service (SKNIS)- aired on Wednesday 10th July 2024.
During his interview with host Ian Richards, Louard emphasized the need to consider demographic changes and the aging population. “…we can increase our age pension,” he said, adding that – LOCAL NEWS –
“we currently have an age pension, but must we change that to a retirement pension?” Louard addressed the current pension age, noting: “We’re currently at 62, and across our counterparts in the Caribbean, we see an aging population.” He explained that data from the Social Security Fund shows the average age at death for a male is about 74 and for a female, 76. “So we have 92 year olds and older who are receiving pension.
It currently represents about 11% of the pensioners that we pay. So we’re living longer. Through our health programs, and that’s a key human development indicator, that our healthcare systems are able, good enough, that we have longevity of life so that’s a good thing.
But what we ought to do is then to recalibrate our system to ensure that we can cover, and that we can take care of all of the persons who we’ve made this long-term pledge to, if you will, over the next 60 years.” Considering these demographic trends, Louard suggested potential changes, such as increasing the pension age. “Can we make some tweaks in terms of increasing?
Can you wait until you’re 63? Can you wait until you’re 64? Can you wait until you’re 65 to claim that pension? Because you’re living longer, and you’ll get it for much longer,” he stated. In discussing the idea of moving from an age-based pension to a retirement-based pension.
“As I mentioned, we have persons who are 92 years and over who are currently receiving; they’ve been receiving it for 30 plus years. So, bearing that in mind, that the demographic changes, the aging of our population, we can increase our age pension.
Another thing we can look at, so we currently have an age pension. But do we change that to a retirement pension? I’ll tell you what I mean. So there are persons currently who, and we understand, there are some persons when they get to age 62 and they claim their pension, because of their income and because of their financial situation, they have to continue to work, and we get that.” He added: “What we’re talking about are those high income earners.
When we look at our data set and our data, there are some high income earners in St. Kitts and Nevis. They’re making much more than the ceiling. So the monthly ceiling that you pay Social Security contributions on is $6,500.
They’re making significantly more than $6,500. They’re receiving their pension as they ought to because they have qualified but they continue to work and get paid… 67, 70, and they continue to work and they continue to get a high wage.
Can we put something or make a change in terms of how we pay that pension, moving it from an age to a retirement?” He emphasized: “…I’m talking about the high income earners. I want to be clear. The high income earners.
We’re not talking about the persons who need to continue to work, after they get to 3
a pension age. So can we introduce a retirement age? Can we introduce in St. Kitts and Nevis a national retirement age? Because Social Security is 62, but a lot of employers who have their own employer pension plans, they have lower ages.
Some have 60.” He shared an example of a construction worker who believed his pension was miscalculated. As understood, initially, this worker earned well at a company, but later, as a self-employed worker, he chose a lower contribution tier.
Hence, at 62, his pension was based on these lower earnings. Louard proposed recalculating pensions based on a worker’s best seven years over their lifetime, instead of the current method of using the best three years within the last 15 years.
“What we are saying, that a more equitable or fair calculation in terms of the average wage should be over your lifetime. So we take the best seven years over your lifetime. So it’s no longer within the last 15 years of your working life.” He acknowledged that such change would address disparities
for those who might not have had higher earnings in their final working years. Regarding qualifying conditions for pensions, Louard noted the current requirement is 500 contribution weeks. “Most countries are moving to 750 weeks,” he explained, suggesting that increasing the minimum qualifying conditions and expanding the calculation over a worker’s career would be beneficial.
“So increasing the minimum qualifying conditions. Most of them are doing the same thing in terms of giving you credit for your career, in terms of expanding that calculation over your career. So the parametric changes are very similar.
There are other nuances as it relates to wages and so on because you know in a different country a wage might be higher in some countries than it’s in other countries but in terms of a calculation, we’re all moving in the same direction.” Louard spoke about the importance of solidarity in Social Security. Universality, meaning all included, solidarityI’m my brother’s keeper, and equity.
So that principle of solidarity comes up in this thing about a retirement pension.” Notably, a Social Security reform town hall meeting was scheduled to take place on Thursday 11th July at the Solid Waste Management Corporation (SWMC) conference room. Front Page Image: Photo used for illustration purposes only depicts a ‘pension pot’ and a clock (source ifamagazine. com)
