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New public sector pension plan could impact productivity says Shaw

Published:Tuesday | January 5, 2016 | 12:00 AMJovan Johnson

Opposition Spokesperson on Finance Audley Shaw is warning of a "crisis of productivity", with the expected implementation of new pension arrangements for public-sector workers.

The Government is pushing to institute legislation for the new public-sector pension system by April, which could see the workers, who recently got a seven per cent increase in salaries over two years, paying over five per cent in contributions.

However, the former finance minister in the previous Jamaica Labour Party (JLP) administratio told The Gleaner that the situation will pose a problem for the State as upset workers could reduce their productivity at a time when economic growth was paramount.

"You break the wage freeze, but you give them seven per cent, and in a few months' time you take away five per cent. How do you expect them to survive? This is going to result in a crisis of productivity that is going to affect the efficiency of government," Shaw said.

"Workers are stressed out, trying to hustle. Something has to give," he warned.

According to Shaw, the implementation of the pension scheme should have been accompanied by a higher salary increase that he says "would allow a cushion for the workers to begin to make contributions" to the pension scheme.

Meanwhile, the spokesman says he supports the proposal for the Government to match the five per cent pension contribution of public-sector workers, and will bring the issue to the JLP shadow Cabinet.

"I don't think it's an unreasonable proposal. It's worthy of serious consideration," he said.

The Jamaica Civil Service Association said it was uncomfortable with the unwillingness of the State to match the five per contribution by workers, while, the Jamaica Teachers' Association, which represents more than 20,000 workers, says asking teachers for five per cent of their salaries was "unbearable".

The White Paper on Pension Reform, tabled in Parliament in 2013, has proposed that the Government pay 3.5 per cent for the 5.0 per cent contribution that workers will be required to make.