It was with some fanfare that the Minister of Finance recently cut the ribbon at the formal opening of the new corporate headquarters of the National Insurance Board at Queen's Park East in Port�of-Spain. This development is expected to realise savings in terms of the NIB's hitherto rental expenditure and even generate rental income from the first two floors and provide parking for some 241 vehicles.
What struck me, however, is the fact that the investment portfolio of the NIB has been falling from 2.6 per cent in 2015 to less than two per cent in 2016 and the hint of a possible increase in the retirement age from 60 to 65 years of age.
In addition to the falling away of investment income, no doubt due to the global economic environment, there appears to have also been a falling away of revenue from contributions towards the scheme and an increase in expenditure in terms of the payment of benefits, which no doubt prompted the Minister of Finance to contemplate the increase in the retirement age. Recent trends towards early retirement and higher life expectancy has been threatening the sustainability of existing pensions and the payment of superannuation benefits. In Britain life expectancy is set at 77 years of age for men and 81 years for women and the pension age is 65.
In Germany the retirement age is now 67 with the lower birth rate and ageing population playing a major role in this decision. In Greece which is currently grappling with a huge national debt and economic problems, early retirement has been banned altogether.
Increasing the retirement age could help save the country millions of dollars each year because workers will be required to pay into the NIS for a longer period of time while the institution should have to pay out less in social security\NIS benefits. One will need to factor into the equation the impacts of trade unionism and worker morale, in the face of this fundamental change in its terms and conditions of employment and some give and take may become necessary. Perhaps some middle ground where retirement between age 60 and 65 becomes optional could be on offer.
Given the current trend of low energy prices in oil and gas and the current straitened financial circumstances of the economy of T&T, the idea of raising the retirement age from 60 to 65 years of age appears feasible and makes good economic sense.
Peter Narcis