PM Briceno Explains Public Sector Pension Reform
- Government & PoliticsLove NewsNews Flash & Headlines
- March 10, 2023
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Yesterday, the Cabinet announced that the Briceno Administration will implement a phased approach to the Public Sector Pension Reform. In phase one, the goal is to institute, effective July 1, a new contributory pension scheme applicable only to new entrants into the Belize public service. Phase two will include a comprehensive review of the existing public service pension scheme to determine how to make it more effective, efficient, and sustainable. During his budget speech today, Prime Minister John Briceno explained that this fiscal year the government will have spent 95 million dollars on the pension plan for public officials. In the next budget, 2023/24, the spending rises to 100 million dollars. Briceno says that pension reform is needed.
Hon. John Briceño, Prime Minister of Belize: “I want to thank the unions for working with us on this matter. They knew it was coming. They knew it was unsustainable and Mr.Flowers, Dean Flowers and also Elena Smith you know we have to give them some credit that they acted in the best interest of Belize and to be able to talk to their membership to say you know this is something that is necessary. The first time that this came to my attention was in 2004 with then Prime Minister Musa and I think the pension bill at that time was a little over $30 million dollar and now here we are at a hundred million dollars. It has to be done there’s no ifs or buts. The irony of all of this we are making these tough decisions that will not benefit our government because as a government we will not be able to get the real benefits of what we’re doing until all of these people have come out of the system. With the unions since we knew we didn’t have enough time by April first we said okay let’s take it in two phases. The first phase is to say that the unions have agreed that any new entrant starting the 1st of July will have to pay a part of a contributory pension scheme and the idea is that 10% of their salaries is going to be set aside. They’re going to pay 5% and the government is going to match it with 5% so that’s one. But secondly we’re saying now that we are now the phase two is now we have to sit down with the unions to say okay where is the cut off date ? Of course they would like to keep things as they are but we can’t. We owe it to the Belizean people to address this issue so the idea is to be able to get to a cut off point be it people that have served maybe twenty years , fifteen years depends on the negotiations where we say okay let’s say people that have worked for more than fifteen years in the system will stay in the non contributory pension scheme and then those under fifteen years then they would have to start to contribute for their pension. But that has to be worked out. We are working on the numbers to point out to them the cost what is going to be able to cost the government but the point I want to make again this is not something that we are going to benefit. We will still have to pay the increases of the pension every year probably the next maybe eight, nine, ten years we’re going to start to feel the effect of making the right decisions.”