St Helena : St Helena Pensions Consultation
Submitted by Saint Helena Herald (Public Relations Information Office) 20.01.2012 (Article Archived on 03.02.2012)
The St Helena Government is planning to change the pensions arrangements for staff who joined the service before 1 April 2010.
Pensions Consultation
The St Helena Government is planning to change the pensions arrangements for staff who joined the service before 1 April 2010. The changes are being made in order to ensure that pension payments remain affordable, to modernize outdated provisions, and to ensure better mobility between the public and private sectors. These changes do not affect staff who have already left SHG.
St Helena faces a number of issues which make pensions reform necessary. These include:
• Increasing lifespan which means pensions are paid to more people and for longer
• An ‘unfunded’ scheme which means that all pension payments have to be met from recurrent income
• An increasing number of pensioners and a falling number of working age taxpayers
• A reduction in budgetary aid from the UK, meaning that St Helena will need to fund a greater proportion of pensions from its own local resources
• The way pensions for staff who leave before retirement are affected by inflation.
St Helena Government wants to ensure that its staff continue to receive adequate pensions in retirement. These proposed changes are designed to achieve that whilst reducing the overall cost of the current scheme.
The main changes proposed are:
• Increasing the normal retirement age from 60 to 65 over a ten year period starting in 2014.
• Changing the rate at which pension is earned (from 1 April 2012 onwards) from 1/600th of salary for each month of service to 1/800th for each month of service, which is the rate used for calculating retiring allowances for non-pensionable staff
• Allowing ‘frozen’ pensions (for pensionable staff who leave after completing ten years service) to be increased for cost of living between when they leave and when they reach retirement.
The proposed changes have been discussed at a series of talks with SHG staff and the initial proposals have been modified as a result of staff feedback in order to:
• Ensure that eligibility for pension benefits earned up to 31st March 2012 is not lost and can still be taken from the age of 60.
• Improve the terms considerably for those who are required to leave after the age of 55 through redundancy or for medical reasons.
• Improve the terms a little for those who choose to leave between 60 and the normal retirement age that applies to them based on their age.
• Improve terms for part time staff.
Changes to pension arrangements require changes to the current Pensions Ordinance and Regulations. A consultation document, showing the proposed changes to the Ordinance and Regulations, together with explanatory notes, will be available from Friday 20th January 2012 and can be obtained either from the Receptionist at the Castle, the Public Library or the St Helena Government Website www.sainthelena.gov.sh . The Bill itself will be published shortly.
Members of the public and other stakeholders are invited to submit written comments by no later than Friday 17th February 2012. These should be addressed to the Clerk of Councils, the Castle or emailed to cofcouncils@sainthelena.gov.sh
SHG staff have had the opportunity to attend talks on these proposed changes and to feedback their views through various channels. SHG staff are welcome to make submissions to the public consultation.
Following the formal consultation period, the Bill will be reviewed in light of the comments received and subsequently presented to Executive Council with any amendments. Elected Members will then decide on whether the Bill should be approved at the formal Legislative Council session scheduled for March.
Financial Secretary
The Castle
19 January 2012
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