Rajendra Rampersaud, the former Chairman of the National Insurance Reform Committee says that the proposed increase in the pensionable age to 65 is based on a number of factors and is not cast in stone.
Rampersaud said that the recommendations made in the reform committee’s report are based on a study done which took into consideration the life expectancy rates in Guyana, the type of job one does and the number of contribution one can make.
Noting the concerns that people have been expressing over the proposal, he said that they were meant to be considerations for “down the road.”
He said that as the Scheme stands, the employees of tomorrow will have to pay the pensions of yesterday, and the proposed changes will remove some of the burden from the backs of future generations.
Rampersaud explained that the increase is meant to be tied to a hike in the retirement age for public servants and that the actuary is still to advise on it.
He noted that across the Caribbean the age for pensions is going up to 65 and in some cases 67 years.
He added that the age of 65 was meant to target those categories of workers who didn’t perform labour intensive tasks, like cane cutting and other strenuous work that tend to shorten lifespan.
Leader of the PNCR Robert Corbin said that there should have been broader consultations to examine the issues concerning the NIS and its viability.
He said that he doesn’t believe the last actuarial review done in 2001 has been taken fully on board. He said that any review of the Scheme should be based on an actuarial study.
He said that if the pensionable age recommendation was to be put in place, then people will only have about three years of collections upon qualifying for a pension, given the average life expectancy.
He said that a social security scheme such as the NIS needs to have the benefit of scientific analyses, and not just from lay persons, to ensure the longevity of the scheme.
In addition to the concerns of the proposed age of pensions, the PNCR leader is concerned about the way that the NIS funds were invested to finance the Berbice Bridge. He made it clear that while the party supports the building of the bridge, the way the NIS was used to part-finance it was worrying.
General Secretary of the PPP Donald Ramotar said that as regard the proposals of the Reform Committee, the two main principles that would be in the party’s mind would be the maximisation of benefits to NIS’ contributors and the sustainability of the Scheme. Ramotar said that the party is calling for broad consultations to consider the views of all stakeholders before anything in the report is fully decided upon.
He said that the party was never a part of any discussion that the Committee might have had while compiling its report.
Too high
Meanwhile, some persons on the verge of age 60 in interviews with Stabroek News have slammed the recent proposal saying that they may not make it to 65 to collect from the Scheme, to which they have been paying contributions for half of their lives.
In separate interviews, they all said that such a proposal should be discarded. “Age 65 is too high. I don’t know if I would live to see that,” said Jairam (only name) a security guard, a job he has been at since 1982. He said that he has worked at a number of different workplaces and knows that he has been making his payments to the NIS. “I am now 55, you mean I have to wait another ten years to get my pension? That is my money!” Jairam declared.
He asked if the family of a pensioner still gets the money should the person die while waiting for the pension, a prospect that a lot of people face.
The National Insurance Reform Committee’s report is with Cabinet for consideration. In addition to the recommendation of raising the pensionable age, the committee has proposed investment pathways and changes to policies governing its staffing and operations in a bid to make the scheme leaner and better able to meet its financial obligations.
Noel Persaud will be 60 years old in December. “I have been continuously paying my contributions since the commencement of the Scheme in 1969. I know that a lot of Guyanese will be affected by this if the proposal goes through,” a concerned Persaud said.
He is of the view that should Government approve of the new measures, it wouldn’t look good for the country, given that the average life expectancy in Guyana is 66 years. “People won’t be getting their benefits and the hurtful part is that NIS is compulsory. It is totally absurd,” he said.
“I retired at 55. NIS uses your salary for the last three years to calculate your pension. If I have to wait ten years, when the NIS bases their calculations on my salary from ten years ago then when will I get?” Persaud is a former environmental health officer in the Mayor and City Council (M&CC).
A number of trade unions have criticised the proposed increases and called on Government to increase the age of retirement for public servants so that there will be a seamless transition into the NIS pension collections.
Although Yvette Best is many years away from even the present pensionable age, she is still concerned about the proposals.
Best, a librarian, is of the view that a lot more effort should have been made to educate people on the benefits to them and the Scheme that the changes will bring. “I don’t think the proposal is a very attractive one,” she posited.
She pointed out that in Europe and North America people work way beyond age 60 but noted that their lifestyles were different.
Best said that the situation in Guyana doesn’t allow for such a lifestyle. “Persons should be given the assurance that they should be able to find active employment,” she said.
