MINISTER of Finance and the Public Service Audley Shaw says the Government has done as much as it can to smooth the path to the passage of the long-delayed public sector pension Bills in the Senate on Friday.

“We have been trying to make it as smooth as possible. Even the $1.5-million income tax threshold is a part of the strategy. It is a cushion,” Shaw told the Jamaica Observer on Tuesday, after learning of the planned resumption of the debate.

The two Bills — The Pensions (Public Service) Act, 2017, and The Constitution (Amendment)(Established Fund) (Payment of Pensions) Act, 2017 — seek to establish a defined benefit contributory scheme to which all pensionable public sector employees will contribute five per cent of their salary, as well as remove the constitutional provision for a non-contributory pension fund for the workers.

The Senate last discussed the Bills on June 28, its final meeting before Parliament’s summer break began. At that meeting the vote on the Bills was delayed, prior to committee stage, after Opposition senators pleaded for a further delay to digest 25 amendments submitted by the Government in response to concerns raised about the Bills.

Some Government members expressed concerns about another delay as the Opposition kept recommending more changes. However, Leader of Government Business Kamina Johnson Smith agreed to a further delay after discussing the call with representatives of the finance ministry attending the meeting.

Senator Johnson Smith said that the ministry’s team agreed to the delay in the interest of a bipartisan approach to the Bills.

“It is good for us all to recognise the context in which we are delaying this Bill. It is in the interest of seeking bipartisan support on the work that has been done, because we feel confident in the amendments that have been put forward and in their soundness,” she stated.

Shaw said on Tuesday that the essential issue is equity, as it is unfair that with some government employees paying as much as four per cent towards their pension (widows and orphans paid by civil servants), while others, like the teachers, do not make any contribution at all.

The police currently contribute two per cent and Members of Parliament (MPs) contribute six per cent. But when the pension reform measures are implemented, all civil servants will be required to contribute five per cent of their salary annually.

The Government is to phase in the contributions between April 2018 and April 2019. The legislation also provides for the creation of a segregated fund for contributions; a gradual increase in the retirement age to 65; and harmonisation of legislation regarding public sector pensions in a single statute; as well as repeal of several previous enactments dealing with pensions.

The Government will not be required to contribute to the segregated fund, when the debt-to-GDP ratio falls to 60 per cent. The public sector pension scheme currently costs the Government $30 billion annually.

Shaw said that the Government would welcome the shifting of that burden from the government.

The Government’s Economic Growth Council also expects that fund will greatly expand the pool of loan funds for investments in the economy, which can help the country to achieve its five per cent gross domestic product growth in four years (5-in-4).