The proposed civil servant pension age hike to 65 years is no small matter. After all, it was already increased from 60 to 62 not too long ago. Mind you, this is a worldwide development as people are generally getting older mostly due to medical advances.
The resulting ageing population puts pressure on pension funds, including the APS of St. Maarten. It also means persons can often work longer.
According to figures provided to Parliament, 1,135 government employees will reach the pension age by 2028. Some 83 will reach 62 and none 65 by 2020; 285 will reach 62 and 83 will reach 65 by 2023; and 679 will reach 62 and 456 will reach 65 by 2028. Readers can do the math, but that’s a considerable number of votes.
Although some of the affected persons won’t mind, others may. Adopting the measure therefore takes political courage but is highly necessary to cut cost and safeguard future benefits.
Prime Minister Leona Marlin explained that the current average APS monthly payment is NAf. 1,950, which is higher than the minimum wage of NAf. 1,516. The average old age AOV payment by Social and Health Insurance SZV is NAf. 650,00, which translates to a combined gross income of NAf. 2,600 for retirees.
However, these are averages, while the country has a lot of immigrants who did not live here for the full 45-year term and get far less than the AOV maximum of NAf. 1,068. Of course, AOV does start at 62, so public sector workers will enjoy such on top of their salaries the last three years of service, but this could have implications for their taxes as well.
There doesn’t appear to be much choice on this issue but to follow the global trend. It’s all about maintaining healthy finances.
