NOT UNIQUE TO BARBADOS - Pension Reform is a global concern because of ageing populations and low birth rates People in most parts of the world are having fewer children and living longer The Situation
In spite of evidence of heart disease and cancer occurring at younger ages than ever before people are generally living longer The Situation
When a population’s birthrate decreases and its longevity increases this impacts on its insurance scheme As time goes by, while there will be many more pensioners there are fewer workers to support those pensions The Challenge
The Approach Actuarial Consultation National Consultation
The Solution Increases in the NIS contribution by 1% of insurable earning each year for four years shared equally by employees and employers Raise the NIS pensionable age by 6 months every four years starting 2006 until 2018 Introduce flexible retirement ages between 60 – 70
Pensionable Age This is the age at which you become eligible to receive an NIS pension. Right now the Pensionable age will remain at 65 until December 31, 2005. After that it will increase by 6 months every 4 years until it reaches 67 on January 1, 2018
Roll-Back Schedule Time FramePensionable Age Up until December 200565 Between January 2006 – December 2009 65 ½ Between January 2010 – December 2013 66 Between January 2014 – December 2017 66 ½ From January 201867
65 TH BIRTHDAYPENSION BEGINS January 2006July 2006 March 2006September 2006 May 2006November 2006 July 2006January 2007 September 2006March 2007 November 2006May 2007
The Options Flexible retirement The long-term proposal is that individuals will have the option to retire at any age between 60 and 70. At this time you can receive early pension from 63 but in the future others will be able to do so from age 60.
The Conditions Early Retirement If you opt for early pension you would receive a reduced pension. The reduction factor is 6% for each year earlier should you decide to take your pension before your pensionable age or ½ % for each month.
The Conditions Late Retirement If you opt for late retirement the pension is then increased by the same 6 % per year for each year after the new pensionable age
Your Option THEREFORE: If you will be 65 next year and want to opt for early retirement, this is possible HOWEVER:Your pension will be reduced by 3% of the original value (that is ½ % per month for 6 months)
Your Responsibility Applications for Pension should be made at least 3 months before the age at which pension may be taken Collect the necessary application forms from the Customer Service Desk at the National Insurance Office