Pension reform “foremost” on Gov’t 2022 agenda – Gonsalves

By Admin. Updated 12:45 p.m., Friday, December 17, 2021, Atlantic Standard Time (GMT-4).

Finance Minister Camillo Gonsalves said that pension reform would be foremost on the government’s agenda for the 2022 fiscal year.

While presenting the Estimates of Revenue and Expenditure for 2022 in Parliament on Monday, Mr. Gonsalves said pension continues to be one of the more significant items of the recurrent expenditure in 2022. 

Some 60.3 million dollars in the recurrent expenditure of the 2022 estimates have been allocated to pension payments.  

He said budgetary provisions for pension have grown significantly in recent times. 

He noted that with the increase in average life expectancy, added medical expenditure by the government and rising inflation, nominal pension is bound to increase in the future. 

The minister of finance said the allocation towards pension is fiscally unsustainable as the system is non-contributory and is being financed by current revenue. 

Gonsalves said there is a need to ensure that adequate funds are being set aside to meet future liabilities as they accrue. 

He said with constricting fiscal space consequent upon COVID-19 and the volcanic eruption, the government has to look at reforming the defined benefit  pension program, as high pension will continue to reduce fiscal space available for health, education and other welfare related priorities. 

He said this can have serious knock-on effects on the vulnerable among us. 

The finance minister said discussions will commence on the issue with the various stakeholders in the upcoming fiscal year.

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