In 2023, the amount provided to pay pensions to retired civil servants and the Government’s counterpart contribution to the NIS for civil servants currently employed is $ 75.4 million. This amount is comprised of:
Pensions $60.3 m
NIS Contribution $15.1 m
$75.4 m
Minister of Finance Camilo Gonsalves says Pension continues to be one of the more significant items of the Recurrent Expenditure in 2023.
“The future burden of the government pension plan would be substantial as the government is the largest employer in the country and pension promises in the public sector is relatively generous and future payments have to be made directly from the government’s revenue (pay-as-you-go). This makes our current public sector pension system fiscally unsustainable as it is non-contributory. I am aware that pension reforms are passionately disputed in many countries but reforms will have to be undertaken in order to ensure that adequate funds are available to meet future liabilities as they accrue”, Gonsalves said.
The minister stated that In an era when those in the private sector have seen their pension provisions decrease, pensions in SVG’s public sector continue to look generous.
“The National Insurance Services (NIS) Executive Director spoke recently at one of his public consultations about the need for pension reforms and the “generous” but “unsustainable” public pension system in SVG. He made the point that the NIS is now unsustainable in the medium and long term if no reforms are made and further that pension reforms must be done by 2024 or “draconian measures” may be applied. This is a clear indication that we have to act now, consequently, in the budget year 2023 pension reform would be high on the government’s agenda and we intend to commence discussions on the issue with the various stakeholders in the upcoming fiscal year”. Gonsalves stated.
