Employers asked to align retirement age with pensionable age

The National Insurance Services (NIS) has recognized the challenges being faced by non-pensionable workers in St. Vincent and the Grenadines (SVG), and a call is being made to employers to make policy changes to assist this group.

Under the parametric reform system implemented on January 1, 2014 the normal pension age was gradually increased from 60 to 65, over a 15-year period. An employee’s date of birth determined their pensionable age, and only those born in 1955 and before would be considered to have reached pensionable age at 60.

For persons who retire before their pensionable age, a penalty of six percent per each year before the pensionable age is deducted from the retirement benefits.

Executive Director of the National Insurance Services, Stewart Haynes, recommended “closing the gap” between the retirement age and the pensionable age.

“…one of the reasons why we instituted the early retirement is because of that factor, the non-pensionable workers that retire at 60 would have no source of income, so we won’t be helping them. We [would be] pushing them into poverty which mangles our objective of poverty alleviation.

“If we could get employers aligning their retirement age with NIS pensionable age then these reforms are more elegant,” Haynes explained.

In the October 7 edition of SEARCHLIGHT the plight of pensioner, Winston Boyea was featured. Boyea made the claim that he was “forced” into retirement by his former employer, the St. Vincent and the Grenadines Electrity Services Ltd. (VINLEC).

The company had set its retirement age at 60; however for Boyea, who was born in 1960, his pensionable age was set at age 63. As a result Boyea lost 18 percent of his retirement benefits.

In his presentation at a media session on Tuesday, November 20 Executive Director Haynes revealed that a soft survey conducted by the NIS showed that 85 percent of SVG’s pension population receive a pension from the NIS as their only source of income.