FITUN head: Don’t hike retirement age without consulting

RATHER than raising the age of retirement by way of a sudden announcement, the Government must first consult widely, said FITUN president Joseph Remy on Thursday.

He gave Newsday his views on a proposal on Monday in the budget to raise the retirement age from the current 60 to 65 years old.

Globally, the pensions for ageing populations are supported by contributions from a shrinking pool of younger workers. This has made many nations review their state pension schemes. In the UK, for instance, it is being gradually increased and will be 68 in 2028.

Remy was concerned not with what was being said but how the Government was trying to get it done. He said it should have been discussed at the level of the National Tripartite Advisory Council (NTAC) made up of government, business and labour, rather than by a sudden announcement by Finance Minister Colm Imbert.

“I’m of the firm belief those things should be a crucial point of engagement at the NTAC. Coming out of those discussions, we look at all the ramifications and then advise accordingly.”

But he regarded the Government as having an end in mind and now working out how to achieve it.

“It’s like I have an old math book and I look in the back and see the answer is 40, and then I work backwards to see how I get to 40.

“My concern is the process and methodology used, because when you publicly announce the age increase, you instil fear.”

Remy said unlike Imbert’s announcement, the issue needs a different approach.

“We are aware of the challenges the National Insurance Board (NIB) is having.

“The actuarial report would have said the benefits they are paying are now outstripping the contributions, and the sluggish investment climate means the investment portfolio cannot fill the gap to realise that shortfall.”

He said as a result two possibilities were being considered, namely raising the contributions and/or raising the retirement age.

“The discussion we have started pointed to a graduated approach to do this thing. So it was supposed to be those persons who reach a certain point in terms of their access to the benefits, and then you move incrementally to 65 years. Those were the discussions that had started.

“But when the minister comes and says carte blanche, 65, without saying the process by which it ought to be done...”

Remy emphasised that the NIB is a tripartite body, which the minister has now put into an uncomfortable situation.

“NIB is an organisation by law which is made up of business, government and labour. NIB has to engage in a process of engagement for them to move the retirement age to 65.”

He said FITUN was mindful of the challenges of the NIB but did not want TT’s social security system to collapse.

Remy wanted to know there was some process of engagement that will look at all the implications for workers, business and the country.

“We are interested in the plan having sustainability and viability. That’s the labour movement’s policy. We want the plan to be successful, because we would want people to have a social security net that gives them some level of comfort and relief at the end of the day.”