PUBLIC ADVISORY

NIS and Old Age Pensions

The following information was taken from the Budget Speech 2016, presented by the Honourable Colm Imbert, Minister of Finance.
October 5 , 2 0 1 5

Madam Speaker our present public sector pension system is outdated. Before demitting office in 2010, the previous PNM Administration had made considerable progress, with the assistance of international consultants, in developing a new system of pensions for public servants which took into account the effects of inflation. However, this project was abandoned by the previous Administration.

We will revisit this matter as a priority and with the assistance of all stakeholders including the Trade Union Movement and the financial community, we will develop a fair, equitable, modern and sustainable pension system for the public sector. Retirees will no
longer have to live on meagre pensions.

Madam Speaker, in the interim I propose to strengthen and extend the viability of the national insurance system to 2036. If this is not done immediately, the National Insurance System will be unable to pay future pensions as was determined by the 9th Actuarial Review of the National Insurance Fund. This Review was completed some time ago, but was not laid in this Honourable House.

In keeping with our statutory obligation, we will lay in the shortest possible time this Review in this Honourable House, so that all concerned can appreciate and understand the current situation with respect to the sustainability of our National Insurance System. Consistent with the 9th Actuarial Review, I will introduce legislation to increase all earnings class limits by 13.5 percent with the maximum insurable earnings class limit increasing from $12,000 to $13,600. The contribution rates will also be increased from 12.0 percent to 13.2percent. These adjustments will take effect on July4, 2016.

In addition, consistent with our 2015 Election Manifesto promise, I propose to increase the cap on joint incomes received by retirees in respect of National Insurance and Old Age pensions. The new cap will now be $5,000, or an additional $500.00put more money in the pockets of 88,000 senior citizens. This measure will take effect on December1, 2015.