Minister of Finance and Planning Dr Peter Phillips, has tabled in Parliament the Pensions (Public Service) Act which seeks to give effect to the proposals for reforming the public sector pension scheme.

According to the Bill’s Memorandum of Objects and Reasons, it is seeking to do this by:

(1) establishing a defined benefit contributor scheme where all pensionable officers will contribute five per cent of salary;

(2) establishment of a segregated fund for the contributions at a time to be determined by the minister;

(3) gradually increasing the retirement age to 65 years;

(4) and, harmonising the legislation governing public sector pension in a single statute and repealing several enactments which previously dealt with pension.

The Bill also seeks to make consequential amendments to the relevant pension provisions in several pieces of legislation.

The Bill is also accompanied by a second Bill — short titled the Constitution (Amendment) (established fund) (Payment of Pensions) Act, 2015 — which will seek to amend the Constitution of Jamaica to provide for the payment of the pensions, gratuities and other allowances out of a fund established by law, other than the Consolidated Fund.

The second Bill notes that the Constitution only allows for pensions, gratuities and other allowances for public-sector employees to be charged and paid out of the Consolidated Fund (which finances the budget).

However, the Pensions (Public Service) Act, 2015 will establish a defined benefit contributory scheme, which contemplates the establishment of a pension fund into which shall be paid all contributions made by pensionable officers and contributions made by the government, as an employer.

The Bill seeks to amend the Constitution to provide for the payment of the pensions, gratuities and allowances out of the pension fund so established.