Unions fear 'bitter medicine' of pension reform

BY CONRAD HAMILTON Observer senior reporter hamiltonc@jamaicaobserver.com

Tuesday, December 06, 2011

ONE key member of the local trade union movement says Prime Minister Andrew Holness's assurances that public sector workers need not fret about the much-touted public sector pension reforms, have failed to allay their fears.

According to chairman of the public sector committee of the Jamaica Confederation of Trade Unions (JCTU), Keith Comrie, members of his organisation are unhappy with the proposals governing this pension reform. Their worries are said to have been heightened amidst reports that the International Monetary Fund (IMF) is not prepared to renegotiate its stand-by loan facility under which tax and public sector pension reform are critical deliverables of the Jamaican government.

Comrie said unionised workers fear that after they commit to the reforms, the Government has room to renege on its commitment to pay a portion of pension contributions

"Yes, we are willing to reform the pension, but not in the context of the green paper that they (the Government) presented. It must be in the context of the actuary that we are using. We bring somebody down from Trinidad to do that. We are willing to contribute five per cent and they (Government) contribute 10, but they say they are not contributing anything. 'When you go on retirement, then that's the time we will pay our part' (government has said)."

"We don't trust the Government to do that, neither one administration nor the other," declared Comrie as he spoke with the Observer.

Meanwhile, head of the Hugh Lawson Shearer Trade Union Education Institute, Danny Roberts, said local trade unions need to make their demands on the political process in the run-up to the general election, and need to urge their members to assess the political parties on the basis of their macro-economic strategy.

He noted that workers "should be examining the manifestos of the two main political parties to see which supports a macro-economic strategy that emphasises growth with job creation, equity and efficiency, and their commitment to the process of social dialogue and tripartism as a mechanism to achieve a New Deal compact similar to that which was achieved under the leadership of a former US President, Franklyn D Roosevelt."

Roberts said trade union leaders should resist any attempt to be drawn into discussions about the reduction of the public sector wage bill as a percentage of Gross Domestic Product, without including on the agenda, issues relating to growth strategy, job creation, tax reform, social security protection and public sector efficiency.

Addressing delegates at a recent workshop, Roberts pointed to the increasing influence of civil society and private sector groupings in shaping the country's economic and social agenda, as well as their impact on Jamaica's body politic, but lamented the absence of a consistent and influential voice representing the views of working classes.

Addressing Jamaica Labour Party (JLP) supporters in Mandeville on Sunday, Holness implored public sector workers not to worry over the impending adjustments, but explained that the move is inevitable as the current public sector pension regime is unsustainable.

"We have to reform the pension system, the age make-up of the population is changing. Older people are living longer, we not having as many children being born as we used to. So what we have now is a pension system where you get your pension based on what other people are contributing, while they are working," Holness explained, as he called on public sector workers to embrace the recommendation for them to contribute to their pensions.

In addition to reforming the public sector pension scheme, the prime minister highlighted the importance of ongoing tax reform efforts. According to him, both pension and tax reform represent critical planks of the adjustments needed to put the country on sound economic footing.

The prime minister likened the intervention to bitter medicine.

"We have some medicine to take," referencing his own experience as a youngster when his great grandmother gave him eucalyptus oil which he said proved to be an effective remedy, despite its unpleasant taste.

Holness hinted that some of the much-needed adjustments will begin to take effect next year.

"Coming in the new year, we going to stop running from what we need to do as a people. We have got to be brave... let us cooperate and do it once and for all," he said.

His comments came in response to mounting concerns among some groups within the public sector that their pensions will be significantly reduced if the proposed measures are implemented.

Holness, in addressing the concerns, acknowledged that he had received reports of policemen contemplating early retirement in a bid to avoid a reduction in their pension payout.

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Unions fear 'bitter medicine' of pension reform