Special Constabulary Force Association argues ...Pension reform will make us worse off
Published:Friday | December 2, 2011 | 12:00 AM
Sabrina Gordon, Business Reporter
Members of the Special Constabulary Force Association (SCFA) said they would be financially worse off under the system proposed to reform the current public-sector pension plan.
While making it clear that they have no objection to reform, they have called for the status quo to be maintained or adjusted.
"In a comparative analysis of the Green Paper and what we currently have, we find that the benefits can currently sustain our members (in that) the person who leaves after a possible 42 years of service might currently be going home with 92 per cent of his salary," said Inspector St George Jackson, chairman of the SCFA, at a pension forum at the Jamaica Conference Centre in downtown Kingston.
The forum was held by the association with a view to sensitising members on the current pension-reform proposal for public-sector workers.
In attendance were some 200 members of the Island Special Constabulary Force, whose membership total about 2,000.
The Special Constabulary Force is just one set of public-sector workers which the pension reform will affect.
"When we go home, it cannot be that we see our pensions reduced from 92 per cent to just over 46 per cent," Jackson told the forum.
Currently, members of the police force contribute 1.7 per cent of their salary to the consolidated fund, out of which pension benefits are paid.
Requests of proposal
The proposal in the Green Paper is a recommendation for an increase in contribution up to five per cent, not just for the police, but for the general public sector.
The proposed reform also calls for a reduction in the accrual rate, which is the rate at which members build up pension benefits whilst they are active members of a scheme.
The Green Paper proposal is for the accrual rate to be reduced from 2.2 per cent to 1.8 per cent, another issue with which the SCFA has objected.
The reduction in accrual rate, however, is expected to be effected over a 10-year period and will only affect workers currently below age 50.
Taking those factors into account, there would be a drastic fall in the replacement rates, that is, the percentage of a worker's pre-retirement income that is paid out by a pension programme upon retirement.
The income replacement rates fall to below 50 per cent then increase for a short period, finally settling at 46 per cent in the year 2075.
The association indicated that it was not in opposition to reform, but given the circumstances of the job they need to be treated differently.
"We cannot just take the public sector, place them in a basket and say we want reform or talk about public-sector group," Jackson said. "We need to look at each organisation in its own context."
"Pension reform is a complex issue, but the police cannot be thrown in a basket to look at pension reform," he said. "We must look at the aggressive nature of our service, the long hours, lifetime illnesses, empirical data on life expectancy of the police, excessive stress, physiological impact of many officers who have gone through traumatic circumstances, among others," he explained.
"The police cannot continue to be treated as other groups because the career we have chosen is not ordinary, and must not be treated as ordinary, and cannot be the same as other public-sector groups," he said.
The SCFA is proposing that existing members remain on the old pension plan with an option to join the new plan within a specified period of time.
They are also proposing that a comprehensive fund-management system be set up where the pension funds can be invested in safe and profitable instruments, on which adequate returns can be made to make up the pool of pension fund.
"Once contributions continue to be placed in the consolidated fund, it severely limits the returns to members and places a strain on Government to pay out," the SCFA argued.
A committee chaired by Minister with responsibility for the Public Service, Senator Arthur Williams, is now examining the pension-reform proposals set out in the Green Paper.
The reform of Jamaica's pension scheme is one of the central planks of the country's economic programme with the International Monetary Fund.