Specific recommendations have been made to ensure that the NIS remains financially sound and able to continue providing its essential services to the people of Saint Vincent and the Grenadines.
Finance Minister Camilo Gonsalves says this has arisen to avoid last-minute draconian changes or fiscally imprudent government interventions.
Among the high-priority recommendations put forth by the actuarial review are:
An increase in the contribution rate to at least 15% progressively over the next ten years,
making registration and payment contributions mandatory for all self-employed and informal sector workers.
Considering a number of options to reduce long-term old-age pension costs
Consideration of continuing the increase in the pensionable age until age 67 by the year 2032
Reducing the maximum old-age pension replacement rate from 60% to 55%.
Discouraging the take-up of early retirement pensions through adjusted benefit calculations or making the pension formula more progressive
That is, instituting a slightly lower pension rate for those at higher income levels
Gonsalves said the foregoing are the suggestions of the actuarial review.
“According to the World Bank’s ramp aide memoir, NIS must address the imbalances underlined by the actuarial report. The World Bank mission team highly recommends that the NIS follow the actuaries recommendations”.
“Importantly, the Ramps team goes on to calculate that the recommended reforms of increasing the contribution rate from 10 to 15 percent between 2024 and 2030, together with a pension benefit reform as detailed in the 11th actuary report, will postpone the depletion of the reserves by another 15 years, taking it to 2051”, Gonsalves quoted the report.
