Gov't relents! - Five per cent public-sector pension to be phased in
A crucial amendment has been made to the Pensions (Public Service) Act, 2016, with the Government yielding to a chorus of appeals from public-sector workers to implement the five per cent contribution on a phased basis.
President of the Jamaica Teachers' Association, Howard Isaacs, said this development is welcomed by the more than 25,000 public-sector teachers.
"We are happy about that. We need to get the finer details to see how it's going to be done. For us, it is a plus and we would want to see how it unfolds in the days to come," Isaacs told The Gleaner.
The pensions' legislation for public-sector workers is scheduled for implementation on April 1, 2017, the start of the new fiscal year.
Opening the debate on the proposed statute in Gordon House yesterday, Finance and Public Service Minister Audley Shaw said the phasing in of the pensions' law would ease the hardships that workers would face if the full five per cent was introduced next month.
Shaw said the changes come as the Government engages the various public-sector groups in dialogue on the issue of pension reform. He indicated that further talks would be held with stakeholders before the legislation is passed.
"The amendment will allow for the contribution rate of five per cent to be phased in because it recognises the hardships that would be placed on groups if the contributions are raised to five per cent one-off," Shaw emphasised.
The finance minister also sought to allay fears by some public-sector workers that the legislation contained a penalty for early retirement. Shaw said the penalty has been removed, noting that the Government is encouraging early retirement and, therefore, the penalty runs counter to its policy.
A sunset clause has been inserted in the legislation for the Government's early retirement programme, and public-sector workers will have a window under the new law to access early retirement. Shaw said the one-year and one month window spans April 1, 2017 to April 1, 2018.