The old age pension

Jan 20, 2011 Features / Columnists, Peeping Tom

Pensioners do not have the luxury of time. In Guyana, old age pensions are paid from age 65 (this despite the retirement age for public workers being 55).
With the life expectancy being below the age when one receives public pensions, it means that not many pensioners in Guyana are going to enjoy a pension for a long time.
Interestingly, the number of pensioners in Guyana relative to the total population is extremely high, suggesting that if the life expectancy is now below 60, then the number of pensioners receiving public assistance presents something of a statistical anomaly.
There are in excess of 33,000 pensioners in a population of fewer than 720,000 residents. Considering the life expectancy of the country, a residency requirement for eligibility and the fact that public pensions are old payable at age 65, the large number of old age pension registrants does not add up.
It is something that the Ministry of Labour, Human Services and Social Security should examine if it is serious about accruing savings which can then be ploughed into increased levels of pensions.
There could be many possible explanations. The first could be that there may be persons who are deceased but who are still on the register. The authorities may argue that this is impossible given that persons have to appear in person to uplift their pension books. This assumes, of course, that the authorities have confidence in the distribution of pension books process. Surely an audit to establish that there are no problems in this area can be undertaken to establish the integrity of the pension-distribution system.
A second explanation is that persons residing overseas may still be on the register. This too may seem unlikely because of the fact that third parties collecting pensions must do so with an authorization.
Again, there can be no harm in auditing the register to establish that there are not persons overseas who are receiving pensions.
A third possibility is more demographic. Theoretically, it could well be that we are having an aging population but correspondingly a high mortality rate amongst the young which cumulatively would have the effect of keeping the life expectancy low while allowing for an increase in the population of the aged.
However, the last census does not suggest that we do have a high mortality rate amongst the young. In fact, during the last election, the largest segment of voters was young people. The authorities may therefore wish to examine the register once again to determine whether ineligible persons are receiving payments. It is worth a look considering that there will continue to be demands for pensions to be increased so as to provide greater security for the aged.
What should also be looked at is the high number of public assistance recipients. Given the increase in per capita incomes over the years and the general progress that has been made, the number of such recipients should have been significantly slashed by now, thus allowing more resources to be ploughed into old age pensions.
The government has to be careful that it is not creating a dependency syndrome when it comes to public assistance payments. These payments should be only be for desperate cases and only for a short period of time.
While it has been reported that attempts are being made to reduce this dependency, sometimes this is easier said than done. What is needed is for efforts to be made to significantly pare the number of persons receiving social assistance so that the funds released can be devoted to old age pensions.
This year, old age pensioners have, percentage wise, received one of the highest increases they have received in years. Yet the old age pension is still below 25 per cent of the average earned by the lowest paid workers in the country.
The government should set a target that within five years, it would move these pensions to 50 per cent of the lowest paid workers. While old age pensions are not social security, it must be appreciated that there are large number of old age pensioners who have never worked and therefore excluded from social security.
Their only form of income therefore is their pensions.
At present that pension is $6,500, an improvement of what was before but still way too low. Imagine how happy pensioners would be if through improvements in the system, this can be increased to $15,000 per month, and for added pleasure can be paid five years earlier, at age 60.

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