I hope Burt’s fiscal space is different to that of Cox
Reading in today's Royal Gazette (June 22, 2018), I was interested and encouraged to see our Premier and Minister of Finance, David Burt, raise his concerns about the Government's underfunded pension plan.
In the House of Assembly, he told our MPs that the assets of the Public Service Superannuation Fund were valued at $574.1 million in March 2017, compared with $572.7 million three years previously. During that time, he said the unfunded liability increased from $796.6 million to $844.3 million, and the Premier told the House of Assembly that the voluntary retirement age could be increased to 67 as the Bermuda Government grapples with its “underfunded” pensions plan.
He mentioned that a number of actions had already been taken to improve the fund's position, including increasing contribution rates and suspending Cost of Living Adjustment increases for pensioners. But he said: “Despite these actions, the PSSF remains underfunded and there are no simple remedies to resolve the underfunded position of the plan.”
Mr Burt told the House of Assembly: “The Government is sensitive to the challenges facing pension plans of this nature and will take the appropriate steps to ensure the long-term viability of this plan.”
It is interesting to note that, in early 2012, under finance minister Paula Cox, concerns were raised about the island's increasing debt, and, while announcing the Budget in the House of Assembly on February 23, she said: “In order to provide fiscal space in the year 2012-13, the Government will suspend its matching contribution to the Public Service Superannuation Fund and pay a portion of the debt service from the Sinking Fund.”
In essence, she was taking from Peter to pay Paul.
Fiscal space is an interesting term in the accounting profession. I wonder where our present finance minister will find enough of his own “fiscal space” as it relates to the PSSF. I hope his creativity is different from that of Ms Cox.