Finance ministry meets Friday with public sector unions
MINISTRY of Finance and the Public Service officers and public sector trade union leaders are scheduled to meet at the ministry, National Heroes’ Circle, Kingston, on Friday.
The meeting was originally planned to discuss regulations related to the passing of the pension reform bill, but this was aborted last Friday in the Senate after Government senators objected to completing the process and the Government agreed to a further delay until September.
This Friday it is likely that the Jamaica Confederation of Trade Unions (JCTU) will seek to press for more amendments to be added to the 25 the Government has already agreed to insert following recent dialogue with the stakeholders at the instruction of Prime Minister Andrew Holness.
The two pension reform bills — The Pensions (Public Service) Act, 2017 and The Constitution (Amendment)(Established Fund) (Payment of Pensions) Act, 2017 — were passed in the House of Representatives in April with 38 amendments
At that time, Opposition Leader Dr Peter Phillips said that his side would support the provisions of the bills, but insisted that there was a need for a timeline for Government’s contribution to support the segregated fund and to ensure that implementation would allow for early relief of the financial burden the pension has created on public revenue. He also suggested that the initial review period be reduced to 18 months to ensure that the projections occur on time.
However, Opposition members of the Senate seem to have shifted totally from that position, and are demanding that the Government address the outstanding issues immediately.
Opposition Senator Lambert Brown warned the Government in the Senate Friday that the new wage claims the JCTU recently submitted to the ministry, including a 60 per cent pay rise over the next two years, takes into consideration issues like the five per cent contribution Government workers would have to make towards their pension.
He insisted that if the Government wanted moderation in the wage negotiations, which are to start soon, they should delay passage of the pension bills and have further consultations with the JCTU on the issues.
During the debate in the House of Representatives, Minister of Finance and the Public Service Audley Shaw announced a number of concessions relative to the five per cent contribution and related issues. The payment of the five per cent employee contribution, he said, would not start in full until April 2019, at which time the 2017/2019 contract period for the workers, which is about to be negotiated, would have already expired. He said that teachers, who do not currently contribute to their pension, the police, who contribute 1.7 per cent, and employees of parochial (local government) institutions would start paying 2.5 per cent in April 2018, and would not start paying the the full five per cent until April 2019.
In addition, he announced that while other workers would have their retirement age increased to 65, the police’s would remain at 60, with early retirement available from 55 years old, or at 50 after 30 years of service, subject to the governor general’s approval.
Prime Minister Holness had urged the House of Representatives in April not to make the debate a political issue as the cost of public sector pension was too much of a burden on the public purse and could threaten capital expenditure or lead to increased debt.
More recently, in mid-July, he told the triennial assembly of the Bustamante Industrial Trade Union (BITU) that failure to reform pensions would result in a “major crisis on our hands”.
“I cannot overemphasize that point. In 1990, the pension bill of the Government was 0.4 per cent of the Gross Domestic Product (GDP). Today, it has more than quadrupled. It is now two per cent of GDP,” he said.
Holness said Government must find $34.5 billion annually to meet pension expenses, and reiterated the urgent need to pass the bills.
“The pension bill is growing…It is absolutely important that we get these bills passed. The end result will be to the benefit of you the workers and the country,” he said.
Passage of the pension reform legislation is not likely before Parliament resumes in September after its summer/Independence break.