By KHRISNA VIRGIL
Tribune Staff Reporter
kvirgil@tribunemedia.net
THE Christie administration is reviewing public sector pension plans ahead of projections that have determined drastic payout increases in the years to come, according to State Finance Minister Michael Halkitis.
As it stands, Mr Halkitis said yesterday, pension liabilities for public sector employees are estimated at $1.5bn. That expenditure is forecast to increase to $2.5bn by 2022 and then to $4.1bn by 2032.
He was speaking as debate of the 2014/2015 budget got underway. The government is moving a resolution to borrow $343m for the new fiscal year. When compared to the $465m borrowed during the last year, Mr Halkitis said there has been a significant decrease in the funds needed to cover recurrent expenditure. The government borrowed $512m in the 2012/2013 fiscal year.
“In light of our fiscal position,” Mr Halkitis said, “the projected growth in pension liabilities and cash outflows is simply not sustainable. A study undertaken for the Government by KPMG highlights the magnitude of the challenges that must be addressed in this area.
“Future cash outflows are expected to increase significantly to around $140m per year by 2022, from around $60m currently.”
Mr Halkitis said the government must focus on proactive measures as it responsibly handles public funds to control the country’s debt. He said discussions are now taking place with stakeholders to determine a course of action.
“It is clear that we will need to develop options for effectively dealing with these future pressures on our public finances.
“To that end, the Ministry of Finance has convened the stakeholders from across the public sector to recommend a strategy on how government will move forward with a comprehensive solution that considers existing and future employees of the Government and public corporations, with pension plans that are adequately funded and encourage greater mobility of employees across the wider public sector,” he said.
Comments
sheeprunner12 10 years, 5 months ago
Pindlings gravy train and abuse of the civil service catching up with the government now........... at least HAI regulated NIB retirement pensions and deductions to help civil servant retirees ............... but honestly, what system can survive if employees are collecting a pension/gratuity that they didnot even contribute ONE cent towards??????????
Honestman 10 years, 5 months ago
PUBLIC SECTOR PENSIONS CANNOT BE SUSTAINED AT THEIR PRESENT LEVEL. YOU DON'T NEED TO HAVE A MASTERS IN ECONOMICS TO KNOW THAT. CIVIL SERVICE PENSION PROVISION IS A CHALLENGE FOR ALL FIRST WORLD COUNTRIES AND THESE ARE COUNTRIES WHERE RETIREES HAVE CONTRIBUTED A HEALTHY PROPORTION TOWARDS THEIR ULTIMATE PENSION. THE BAHAMAS CANNOT CONTINUE TO IGNORE THE HUGE AND UNSUSTAINABLE PENSION DEFECIT IN THE PUBLIC SECTOR. I AM GUESSING THAT RELATIVELY FEW BAHAMIANS IN GOVERNMENT EMPLOYMENT HAVE MADE ANY REALISTIC PROVISION FOR RETIREMENT AND THEY ARE RELYING ON A PROMISE FROM GOVERNMENT THAT SIMPLY CANNOT BE KEPT. FOR THOSE OF YOU IN THE PUBLIC SECTOR WHO HAVE TIME ON YOUR SIDE, SUGGEST YOU START SAVING NOW . FOR THOSE OF YOU APPROACHING RETIREMENT AGE, YOU MAY NEED TO REVIEW YOUR RETIREMENT PLANS.
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