One of the pos­i­tive as­pects of the cur­rent Unit­ed Na­tion­al Con­gress (UNC) ad­min­is­tra­tion is its at­ten­tion to the wel­fare of Trinidad and To­ba­go’s pen­sion­ers.

The Gov­ern­ment’s de­ci­sion to re­move in­come tax on pri­vate pen­sions, ef­fec­tive Jan­u­ary 1, 2026, was a wel­come ini­tia­tive. It pro­vid­ed mean­ing­ful re­lief to thou­sands of re­tirees, par­tic­u­lar­ly those who in­vest­ed a por­tion of their pre-re­tire­ment in­come in pri­vate pen­sion plans to se­cure their fi­nan­cial fu­ture.

In his Oc­to­ber 13, 2025 bud­get pre­sen­ta­tion, Fi­nance Min­is­ter Dav­en­dranath Tan­coo said: “In keep­ing with the Gov­ern­ment’s promise dur­ing the 2025 elec­tion cam­paign, I pro­pose that pri­vate pen­sions be ex­empt­ed from in­come tax. These amend­ments will take ef­fect on Jan­u­ary 1, 2026.”

The ex­emp­tion cov­ers in­come de­rived from ap­proved pri­vate pen­sion fund plans and de­ferred an­nu­ity plans. How­ev­er, trans­lat­ing that promise in­to law re­quired amend­ments to the rel­e­vant leg­is­la­tion through the Fi­nance Bill, 2026, which had to be ap­proved by both the House of Rep­re­sen­ta­tives and the Sen­ate be­fore re­ceiv­ing pres­i­den­tial as­sent.

The Bill amend­ed ap­prox­i­mate­ly 30 Acts and Or­di­nances, cov­er­ing pen­sion re­form, tax and ex­cise du­ty ad­just­ments, en­er­gy in­cen­tives and sig­nif­i­cant­ly high­er fines.

Un­for­tu­nate­ly, the pri­vate pen­sion ex­emp­tion was not in­clud­ed in the first Fi­nance Bill for fis­cal 2026.

When pre­sent­ing that Bill on De­cem­ber 5, 2025, Mr Tan­coo ex­plained that fur­ther work was re­quired to col­late and ver­i­fy eco­nom­ic da­ta. The Min­istry of Fi­nance and the Board of In­land Rev­enue (BIR) need­ed to de­ter­mine the scope of the ex­emp­tion with­out cre­at­ing loop­holes or un­der­min­ing short-term fis­cal sta­bil­i­ty.

In a one-on-one in­ter­view with Guardian Me­dia’s Ke­jan Haynes on Jan­u­ary 29, 2026, on the side­lines of the CAF In­ter­na­tion­al Eco­nom­ic Fo­rum in Pana­ma, the Min­is­ter again point­ed to ques­tions sur­round­ing the sup­port­ing da­ta as a rea­son for the de­lay.

That ex­pla­na­tion rais­es an ob­vi­ous ques­tion: why was this re­search and con­sul­ta­tion not com­plet­ed be­fore the Min­is­ter made the com­mit­ment in his Oc­to­ber 2025 bud­get pre­sen­ta­tion?

The Fi­nance Bill, 2026, was first read in the House of Rep­re­sen­ta­tives on June 5, de­bat­ed and passed on June 10 by 28 votes to none, with 13 ab­sten­tions. It was passed in the Sen­ate on June 12 and re­ceived the as­sent of Pres­i­dent Chris­tine Kan­ga­loo on June 25.

Be­fore the pol­i­cy was im­ple­ment­ed, pri­vate pen­sion in­come was gen­er­al­ly sub­ject to the stan­dard 25 per cent in­di­vid­ual in­come tax rate on tax­able in­come ex­ceed­ing the an­nu­al per­son­al al­lowance of $90,000, or $7,500 a month.

The de­lay in en­act­ing the leg­is­la­tion cre­at­ed a cash-flow prob­lem and con­sid­er­able un­cer­tain­ty for pen­sion­ers who had been promised tax re­lief from Jan­u­ary 1. In prac­tice, some con­tin­ued to have tax de­duct­ed from their pen­sions dur­ing the first half of 2026, even though the ex­emp­tion was in­tend­ed to ap­ply from the be­gin­ning of the year. Fur­ther ad­min­is­tra­tive ad­just­ments were al­so nec­es­sary af­ter the leg­is­la­tion re­ceived as­sent.

This is an is­sue that af­fect­ed me per­son­al­ly.

Un­der the ANSA McAL Group Pen­sion Plan, I re­ceive two pen­sions to­talling ap­prox­i­mate­ly $5,800 a month, re­flect­ing two pe­ri­ods of pen­sion­able ser­vice span­ning 1993 to 2001 and 2002 to 2017.

I in­ter­rupt­ed my ser­vice from Au­gust 2021 to Oc­to­ber 2022 af­ter be­ing named Jour­nal­ist of the Year for 2000. The award pro­vid­ed fund­ing that en­abled me to pur­sue a grad­u­ate de­gree in jour­nal­ism at Car­leton Uni­ver­si­ty in Ot­tawa, Cana­da, be­gin­ning in Sep­tem­ber 2001.

Of the ap­prox­i­mate­ly $5,800 I re­ceived month­ly from the Tatil pen­sion plan, the Gov­ern­ment de­duct­ed about $1,500 in tax for each of the first sev­en months of 2026.

My ex­pe­ri­ence il­lus­trates the prob­lem. Pen­sion­ers should not have been promised tax-free pri­vate pen­sions ef­fec­tive Jan­u­ary 1, on­ly to re­ceive the ben­e­fit months lat­er.

The Min­istry of Fi­nance should have com­plet­ed the nec­es­sary re­search and con­sul­ta­tion be­fore the Min­is­ter made that com­mit­ment in his Oc­to­ber 2025 bud­get speech, not af­ter.

In­creas­ing the per­son­al al­lowance for pen­sion­ers

This brings us to the Gov­ern­ment’s pro­pos­al to in­crease the per­son­al al­lowance for pen­sion­ers.

In pre­sent­ing this mea­sure, Mr Tan­coo said: “In fis­cal 2026, we pro­vid­ed mean­ing­ful re­lief to thou­sands of se­nior cit­i­zens by mak­ing their pri­vate pen­sions tax-free.

“How­ev­er, many pen­sion­ers, par­tic­u­lar­ly re­tired pub­lic of­fi­cers, re­main sub­ject to tax on pen­sion in­come ex­ceed­ing $90,000. Our pub­lic of­fi­cers have giv­en decades of ser­vice to this coun­try and de­serve greater fi­nan­cial se­cu­ri­ty in re­tire­ment.

“I there­fore pro­pose to in­crease the per­son­al al­lowance for pen­sion­ers from $90,000 to $102,000 per year.

“This mea­sure will pro­vide ap­prox­i­mate­ly $11 mil­lion in tax re­lief to pen­sion­ers and will take ef­fect from Jan­u­ary 1, 2027.”

Three ques­tions arise

First, who qual­i­fies for the in­creased al­lowance?

Is the re­lief in­tend­ed on­ly for re­tired pub­lic ser­vants, or does it ap­ply to all pen­sion­ers?

The Min­is­ter refers to “many pen­sion­ers, par­tic­u­lar­ly re­tired pub­lic of­fi­cers”, but then pro­pos­es in­creas­ing the per­son­al al­lowance “for pen­sion­ers”. The dis­tinc­tion mat­ters. Bud­get speech­es should use pre­cise lan­guage so that tax­pay­ers un­der­stand who qual­i­fies for re­lief.

Sec­ond, will the mea­sure take ef­fect on Jan­u­ary 1, 2027, as promised?

Giv­en the de­lays sur­round­ing the pri­vate pen­sion ex­emp­tion, pen­sion­ers will un­der­stand­ably want as­sur­ance that this mea­sure will be im­ple­ment­ed on time, with­out an­oth­er pro­longed wait for leg­is­la­tion and ad­min­is­tra­tive ad­just­ments.

Third, how much will pen­sion­ers ac­tu­al­ly ben­e­fit?

As­sum­ing the pro­posed in­crease rais­es the rel­e­vant an­nu­al tax-free al­lowance from $90,000 to $102,000 and the ap­plic­a­ble mar­gin­al tax rate is 25 per cent, the max­i­mum ad­di­tion­al sav­ing would be $3,000 an­nu­al­ly, or $250 a month.

The ben­e­fit would vary ac­cord­ing to the pen­sion­er’s tax­able in­come.

A pen­sion­er with an­nu­al tax­able in­come of $100,000, for ex­am­ple, would pre­vi­ous­ly have paid $2,500 in tax on the $10,000 ex­ceed­ing the old $90,000 al­lowance. Un­der the pro­posed al­lowance, that li­a­bil­i­ty would fall to ze­ro, sav­ing $2,500 an­nu­al­ly.

Pen­sion­ers with tax­able in­come of $102,000 or more would ben­e­fit from the full $12,000 in­crease in the al­lowance, pro­duc­ing a max­i­mum an­nu­al tax sav­ing of $3,000.

These cal­cu­la­tions as­sume that the al­lowance ap­plies to the pen­sion­er’s rel­e­vant tax­able in­come, that no oth­er de­duc­tions or in­come-tax pro­vi­sions al­ter the cal­cu­la­tion, and that the ap­plic­a­ble mar­gin­al rate re­mains 25 per cent.

The Min­is­ter es­ti­mates that the mea­sure will pro­vide ap­prox­i­mate­ly $11 mil­lion in tax re­lief. It would be use­ful for the Min­istry of Fi­nance to ex­plain how that es­ti­mate was cal­cu­lat­ed and how many pen­sion­ers are ex­pect­ed to ben­e­fit.

The prin­ci­ple is sound: peo­ple who have spent decades con­tribut­ing to the coun­try’s de­vel­op­ment de­serve greater fi­nan­cial se­cu­ri­ty in re­tire­ment. But the Gov­ern­ment must clear­ly de­fine el­i­gi­bil­i­ty, ex­plain the pro­ject­ed ben­e­fits and en­sure that the promised re­lief is de­liv­ered when it is due.

Fixed-in­come in­vest­ments

An­oth­er en­cour­ag­ing as­pect of Mr Tan­coo’s bud­get pre­sen­ta­tion was the pro­pos­al to re­launch the Gov­ern­ment Sav­ings Bond Pro­gramme, with bonds de­nom­i­nat­ed in both Trinidad and To­ba­go and US dol­lars.

The Min­is­ter said:

“The pro­gramme is de­signed pri­mar­i­ly with in­di­vid­ual cit­i­zens and small savers in mind, al­low­ing per­sons to in­vest amounts such as $1,000, $5,000, $10,000 or more. We in­tend to of­fer these Bonds with a fixed rate of in­ter­est, in both Trinidad and To­ba­go and Unit­ed States dol­lars and with var­i­ous tenors.

“These bonds will pro­vide cit­i­zens with an ad­di­tion­al in­vest­ment op­por­tu­ni­ty, of­fer­ing com­pet­i­tive re­turns while help­ing them build long-term fi­nan­cial se­cu­ri­ty.”

This ini­tia­tive could pro­vide small savers and pen­sion­ers with an­oth­er av­enue for earn­ing pre­dictable re­turns on their in­vest­ments. Fixed-in­come se­cu­ri­ties can be par­tic­u­lar­ly at­trac­tive to re­tirees who de­pend on in­vest­ment in­come to sup­ple­ment their pen­sions.

The pro­pos­al to of­fer US-dol­lar bonds is es­pe­cial­ly in­ter­est­ing. If struc­tured at an at­trac­tive in­ter­est rate, such bonds could en­cour­age the repa­tri­a­tion of US dol­lars held in for­eign bank ac­counts and in­vest­ment port­fo­lios, while pro­vid­ing the Gov­ern­ment with an­oth­er source of fi­nanc­ing.

The chal­lenge will be to of­fer a com­pet­i­tive coupon with­out im­pos­ing an un­sus­tain­able bor­row­ing cost on the Trea­sury.

As a point of com­par­i­son, the Trinidad Pe­tro­le­um Hold­ings Ltd bond car­ries a 9 per cent coupon, while the Port of Spain Wa­ter­front bond car­ries a coupon of 7.875 per cent and is amor­tis­ing.

Against that back­ground, a coupon in the re­gion of 7 to 9 per cent on a 20-year US-dol­lar Gov­ern­ment bond could at­tract in­vestor in­ter­est. How­ev­er, the ap­pro­pri­ate rate would de­pend on pre­vail­ing mar­ket con­di­tions, the Gov­ern­ment’s cred­it risk, the bond’s re­pay­ment struc­ture and whether the in­ter­est in­come would be tax-free.

A 20-year bond would al­so re­quire care­ful con­sid­er­a­tion of liq­uid­i­ty and in­fla­tion risks, par­tic­u­lar­ly for pen­sion­ers who may need ac­cess to their mon­ey be­fore ma­tu­ri­ty.