Thu | Jun 20, 2019

Finance Ministry moves to review public sector pay, allowances

Published:Sunday | January 20, 2019 | 12:00 AMAvia Collinder

The Ministry of Finance and the Public Service has now moved to develop a new compensation structure in the public sector, having requested expressions of interest from firms for a consultant to review pay and allowances.

It says that expertise is needed to restructure compensation, "taking into account the current

levels of pay and the wide-ranging allowances currently existing, along with the diverse set of jobs and terms and conditions of service."

The review is being funded by the Inter-American Development Bank (IDB) under the project Support for Public Sector Transformation.

According to an advertisement by the finance ministry last week, the consultant is also expected to develop the supporting philosophy and policy to support the new compensation structure.

Firms interested have two weeks to respond, with a deadline of January 28.

The advertisement said that the consultant would be selected in accordance with procedures set out by the IDB. The shortlist is expected to comprise six firms meeting the minimum requirements.

In September 2017, the International Monetary Fund (IMF) reported that allowances paid to public-sector workers in central government accounted for about a third of the wage bill, or more than $55 billion, a conclusion arrived at based on a review conducted as part of Jamaica's agreement under the existing precautionary standby agreement with the Fund.

"Going forward, it is important to rethink the extensive and inequitable system of allowances and the overall pay structure in the public sector," IMF Mission Chief to Jamaica Uma Ramakrishnan said in a statement released then at the end of a visit to conduct discussions on the second review of Jamaica's financial and economic programme.

 

Structural benchmark

 

IMF resident representative for Jamaica Dr Constant Lonkeng Ngouana told the Financial Gleaner then that the review conducted by the Jamaican Government was a structural benchmark under the standby agreement.

That review provided a detailed database of all allowances paid across the 10 employee groups of central government, said Lonkeng.

The review found, for instance, that there are at least 174 types of allowances, accounting for about one-third of the public-sector wage bill, equivalent to three per cent of gross domestic product or about US$$420.9 million. That translates to $55.2 billion in Jamaican currency. The estimate is based on World Bank data, which indicate that Jamaica's GDP in 2016 was US$14.03 billion.

avia.collinder@gleanerjm.com