Elaboration on the public service pension structure

Dec 07, 2015 Letters

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Dear Editor,
Reference the; The Commission of Inquiry into the Public Service,  I would like to add the following, as it relates to, Pensions in the Public Service, GPF, GDF and Joint Services. If the suggested age of retirement is 60 to 65 years, pension should be ¾ of the present salary (e.g. An Assistant Superintendent currently earns one hundred and twenty-five dollars per month (GY$125,000.00, therefore pension due to a retired ASP or Acting ASP should be $93, 750.00 per month) and increased based on life expectancy. At present in the Guyana Police Force (GPF) retirement is based on:  The Completion of 33 1/3   years to get full pension plus retirement at age 55 years; the full pension is half of your present salary for the past three (3) years. I joined the GPF on 21^st of March, 1942 and retired on 31^st of March, 1979. I joined as a Constable with a pay scale of twenty-eight dollars (GY$28.00) per month. I retired as Acting Superintendent of Police (ASP) with a Substantive rank of Chief Inspector.  My Salary was five hundred and seventy-six dollars (GY$576.00) per month and my pension was Two hundred and eighty-eight dollars (GY$288.00) per month.
.I never had an increase in pension, until President Hugh Desmond Hoyte (deceased) took office in 1985 and the subsequent change in government in 1992 when the PPP/C continued the 5% annual increase,  while neglecting to make adjustments for inflation and cost of living adjustment. After many years former President Bharrat Jagdeo gave a meager increase and classified the dollar pensioners including Head Masters, high ranking policemen and all senior government ex employees and junior ranks in the police force with 15 years or less service on the same scale (this included barrack labourers, junior ranks in the GPF with 15 years or less service retired medically unfit were lumped in the same pension bracket. This ideologically imposed pension and benefits plan makes no actuarial and economic sense. This failed socialist experiment in a capitalist economy has left pensioners in tatters.
As a result of the above (8), even a Constable retiring today gets more pension than ranks and public servants who previously served in excess of 33 1/3  years.
NIS is compulsory. When a male contributor all his life provided for the benefit of his wife and family dies, his wife gets no benefits from his contribution. In a situation where she is not a housewife and working and paying NIS, she is not entitled to benefit from her husband’s contribution. NIS response is, you cannot draw two pensions. I think it is unfair and unjust, particularly for a housewife without a job and loss of means upon death of a sole bread winner.
Policemen and the Military should be considered separately! They are always on duty, e.g., he has completed his/her tour of duty and whilst going home encounters a crime is committed within view, he/she has to take action.  In another scenario he/she may be at home and a crime is committed or there is unrest, action has to be taken in line. In the absence of that special consideration, make allowance for them to be paid overtime.
Soldiers are pensionable after twelve (12) years, Member of Parliament (MP) after four (4) years, and Policemen after 33 1/3  years. If the age is of retirement is increased, three (3) generations will meet you in the GPF, that is, if you join at eighteen (18) years, by the next eighteen years of service, the child born on the day you joined will meet you in the GPF and may be more qualified, to be followed by another generation.
Regardless of how “bright” you may be, the GPF works by establishment, so everyone cannot be promoted. A system must be in place for those who cannot be promoted, to be compensated incrementally above their juniors who would be “green” in service. Pensions must be established with automatic indexing for annual increases due to inflation and cost of living increases, such as the elevation of the national minimum wage. Pensions must not be stagnated or left to the political machinations of the day or the whim or fancy of an ideological ruler of the day. Pension and benefits must be calculated by strict formulas agreed to by and not limited to collective bargaining agreements. Some plans increase pension payments to retirees each year to fully or partially match the rate of inflation. This is a highly valuable benefit because it helps your pensioners buying power keep up with rising prices over time.
Examples of 3 main formulas

1. Final average earnings

This formula is based on your average earnings in the years leading up to retirement (for example, in the 5 years before retirement).
Sample formula – 5% x your average salary in the past 5 years x your years as a plan member. Here’s what your pension would be if your average salary was $125,000 and you participated in the plan for 33 1/3 years:

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​Benefit percentage	​5%
​Average ASP’s salary	​$125,000
Years of plan membership	​33 1/3
Formula calculation	​$125,000 x 5% x 33 1/3
​Annual pension	GY$208,333.33

1. Career average earnings

This formula is based on your average earnings during the entire period you were a member of the plan.

Sample formula – 5% x your average salary in your career x your years as a plan member. Here’s what your pension would be if your average salary was $80,000 and you participated in the plan for 12 years:

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​Benefit percentage	​5%
​Average salary	​$80,000
Years of plan membership	​12
Formula calculation	​$80,000 x 5% x 12
​Annual pension	GY​$48,000

1. Flat benefit

With this formula, your monthly pension benefit is equal to a fixed dollar amount for each year you are a member of the plan.
Sample formula – $57,600 x your years as a plan member. Here’s what your pension would be if you participated in the plan for 30 years:

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Benefit amount	​$576.
Years of plan membership	​30
Formula calculation	​$576. x 30
Monthly pension	​$GY$  17,280.00 (GY$207,360.00 annually)

It is because of the current imbalance and political interference that we are stuck with the absence of credible evaluations of pensions and benefits. I recommend we move to progressive job evaluations and benefits for Pensioners of the Public Service GPF, and GDF in order to reverse the ideologically imposed disparity in salaries and Pensioners benefits. I dare say the current pension is an indictment to those who have failed as guardians of a better life. The 50^th anniversary of our Independence, as an emancipated and free country is fast approaching, yet we continue to pay a slaves wage to those who have built and carried this country on their backs. Many are dependent on children or remittances from abroad, and those who are not as fortunate, are living wretched lives even though they have made sterling contributions to this great land.
We must move beyond this morass. We certainly can do better than this. I have lived all my life and served the length and breadth of this country, beyond the call of duty. I am now in my 92^nd year, thanks to the blessings of Almighty God. I know we can compensate our pensioners better than we have. I am looking forward to see, advances in this direction.
G.W.R Nestor
GPF Service Regulation #4800
Medal of Long Service and Good Conduct
Medal of War Service 1942 – 1945
Medal of Independence

 

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