Tuesday, Jul 23rd

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Editorial - It’s about time

Increasing the pensionable age from 60 to 62 was mentioned again, this time by DP leader Sarah Wescot-Williams (see Friday paper). All over the world similar steps are being taken to safeguard the funds in question.

With today's advanced medical treatment folks are simply living longer. That means there are more recipients of and – comparatively speaking – fewer contributors to such social insurance provisions.

Other countries have gone up to 65 or even 67. People don't just die later than they used to on average, but also are able to work longer.

Most employees in St. Maarten probably wouldn't mind continuing another two years, but may want something in return. After all, these persons have spent an entire career thinking they could enjoy retirement at 60.

A transition arrangement is the obvious answer, but not one that defeats the purpose of the austerity measure in the first place. Another option is an incentive whereby a higher old age pension AOV allowance is received at age 62 than would have been the case at 60; of course, with the same condition in terms of financial feasibility.

Aruba had come up with a so-called "flex pension" whereby one could choose freely to stop working at 60 or continue a maximum five years and receive additional income for every added year on the job. However, in the end this proved too complicated and costly, so only a regular but gradual age hike was introduced instead.

One of the major issues is that also the pensionable age of government personnel must be increased accordingly so they are not left waiting two years for their AOV when they go home at 60 with a public sector APS pension. That is also part of the reason it has taken this long to implement the intended adjustment locally.

By coordinating the two the burden on both the APS and AOV funds is reduced and the consultation body for civil servant affairs GOA gave the green light to do so in May 2014. It's now 15 months later and the change still has not materialised, which recently led to criticism from the Committee for Financial Supervision CFT.

Prime Minister Marcel Gumbs had stated back in January that he wanted a "healthy debate" on the issue. His predecessor and current opposition member in Parliament Wescot-Williams is now calling for a prompt explanation on where things stand, particularly the aspect of those already approaching the age of 60. Indeed, it's about time this pending matter is settled once and for all.