SAGE chair: ‘Difficult choices’ to be made on Govt pensions – The Royal Gazette | Bermuda News, Business, Sports, Events, & Community

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SAGE chair: ‘Difficult choices’ to be made on Govt pensions

Difficult choices may have to be made about the future of Government pensions, according to SAGE Commission chair Brian Duperreault.

During a public meeting held this week at Penno’s Wharf, St George’s, to seek public input in reducing Government spending, members of the public expressed concerns about the burden of the existing pension system.

Mr Duperreault said Government’s pension obligations are currently comparable in size to its deficit and clearly unsustainable.

“The scheme we have is very expensive,” he said. “That’s another area where we are going to have to make some difficult choices.”

While he said Government uses a defined benefit system, most other groups have moved to a defined contribution system, which he described as more sustainable.

One member of the public specifically targeted the pensions offered to vested Members of Parliament, saying: “They are breaking the bank and we need to change that.”

Commission member Kim White said: “It’s eight years before they’re vested and it’s two-thirds of their parliamentary salary. It’s the best funded pension plan on the Island. It’s a lot of money.”

Government salaries, which account for the majority of Government spending, was another core topic of discussion.

The audience were told that early into the recession, the Cayman Islands decided that action needed to be taken, and the Government worked with the Civil Service and the unions to establish pay cuts.

However the board members reiterated that mindless austerity would not cause the Island’s economy to improve, and Mr White said that there were some areas where new jobs could actually be created.

He specifically noted the Tax Commission, which employs only three inspectors. As a result, he said millions of taxes due are not being collected.

“I have to tell you there are some areas in Government that are seriously underserved,” he said.

Several suggestions were made throughout the meeting, such as the idea of consolidating some of the Island’s schools and adapting any unused school facilities for community programmes or senior care.

Other Government-owned properties could also be used more effectively according to attendees, one of whom said the Government slip could be rented out when not in use.

He also said the ferry service could improve efficiency by tying off while at dock and travelling slightly slower to reduce fuel costs.

Mr White said the commission had heard claims that the ferry service employs extra staff because some workers cannot be guaranteed to show up.

“Now that’s a failure of leadership if it’s true,” he said. “We need to hear these stories so they can be investigated.”

The SAGE Commission was established earlier this year to provide recommendations on how Government can act more efficiently.

SAGE chairman Brian Duperreault

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Published May 31, 2013 at 9:00 am (Updated May 30, 2013 at 9:56 pm)

SAGE chair: ‘Difficult choices’ to be made on Govt pensions

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