Finance Minister Colm Imbert was on the right track on Tuesday when he said that pushing back the official retirement age to 65 from 60 was "an important matter that requires careful consideration and discussion."
Speaking at the official opening of the new National Insurance Board headquarters at Queen's Park East, Mr Imbert stressed that changing the age at which workers in T&T qualify for a pension was not government policy and that no decision had been taken on the matter.
These are important provisos because such a decision would require a great deal of consultation and contemplation before there is even a discussion about implementation.
The Ninth Actuarial Review of T&T's National Insurance System (NIS)–on which the minister of finance based his comments–is clear that an increase in the NIS retirement age "would be justified" based on two probabilities: that on average the population of T&T is expected to live longer and that in the future the country is expected to face a shrinkage in its working age population, that is those between 16 and 59, and an increase in the number of retirees.
While the actuarial review acknowledges that there is justification in increasing the retirement age, it recommends that the age at which pension is paid without reduction should be pushed back gradually over the period 2025 to 2060.
And the ninth actuarial review also recommends that there should be a gradual increase in the contribution rates, annual adjustment of the maximum insurable earnings and the partial indexation of the minimum pension of $3,000, so that there is some automatic adjustment to the minimum pension based on the rate of inflation.
These are also important matters important matters that require careful consideration and discussion, as the minister put it, so as to facilitate proper, mature and ongoing engagement and consultation with today's, as well as tomorrow's, workforce.
In his presentation, Minister Imbert also redflagged the returns on the NIB's investment portfolio and pledged to work with the national insurance provider to ensure an increase in its investment income by increasing the limit on its foreign investments and by widening the limit on individual investments.
Given the importance of the NIB to every citizen of T&T, it is hoped that Mr Imbert means what he says and that he does not get distracted from his commitment to the NIB by other issues that may only seem more pressing.
T&T, therefore, should hold the minister to his assurance that "that the Government will do whatever is necessary to ensure that our 45-year-old National Insurance Scheme continues successfully for at least another 45 years, and beyond."
In discussing the issue of the sustainability of the NIB, it may also be necessary to remind the minister that the Government is facing a pension crisis concerning its own monthly paid workers.
More than eight years ago, in delivering the 2009 budget, former Minister of Finance Karen Tesheira warned: "The Government's liability in respect of the current pension arrangements had previously been determined to be between $21 billion and 30 billion as at January 1, 2007."
Given the salary and increment increases that public servants have enjoyed since 2007, there is no doubt that the Government's defined benefit liability to its monthly paid employees has grown substantially in the period–yet another matter that requires careful consideration and discussion.
While the actuarial review acknowledges that there is justification in increasing the retirement age, it recommends that the age at which pension is paid without reduction should be pushed back gradually over the period 2025 to 2060.