PSSF not sustainable, says Govt
Government has acknowledged that the civil servants’ pension scheme is unsustainable and plans a review.
And it expected that the review would take place during a one-year freeze of the scheme.
This is revealed in the answers to 25 questions put to Premier Paula Cox by the Bermuda Public Services Union last week.
The Q and A document also reveals that the union sought a commitment from Government that its members retirement benefits would not be threatened by pension reforms to address underfunding of the fund.
In response, Government committed to ensuring that members would have access to affordable, good quality pension schemes. And it said its efforts to reduce the unfunded liability would be fair and transparent to both taxpayers and members of the fund.
The document was obtained by
The Royal Gazette after it was provided to the BPSU’s members at a meeting on Wednesday and through its website.
Scenarios to be studied as part of the pension scheme review included assessing the contributions needed if it was closed to new members, assessing the impact of changing the benefits of the plan, and what level of benefits would be required to sustain it given current contribution levels.
Public sector workers have not accepted a proposal from the Premier to freeze the pension scheme for a year. Instead they have presented counter-proposals for the Government’s consideration yesterday and are awaiting a written response.
The document also reveals that the Price Commission had concluded that more consumer education on food prices is needed and that it could consider tying any additional duty relief to mandatory memorandums of understanding.
In response to a question whether Government would consider increasing the mandatory retirement age, the union was reminded that civil servants could work past mandatory retirement with the permission of the head of the Civil Service.
It also stated that Government has no plans to institute a value added tax or sales tax within the next three years.
But, as promised in the Throne Speech, it will amend the Public Service Superannuation Act 1981 so that public sector workers can access their pension funds in cases of financial hardship along the same criteria as the private sector.
Government stressed that the projected $62 million savings from the pension freeze and pay cut proposal would be used to reduce the deficit and allow it to maintain employment levels and provide services to the vulnerable.
And it rejected as discriminatory a suggestion that money being sent abroad by foreign workers be taxed at five percent, saying there is already a one percent foreign currency purchase tax.