Fatum Pension and Business Day

June 03, 2012 11:04 AM

WILLEMSTAD - One thing is certain and that is that the current social security system is no longer bearable. That was the opening message of the thematic part of the seventh Fatum Pension and Business Day in the Hyatt last Thursday.

This isn’t new because the pension scheme AOV and the Basic Medical Insurance (BZ) are already in a phase of change and now we have the compulsory pension.Opening speaker was Steven Martina, CEO of Fatum. His presentation regarded myths, facts and challenges of the social security system. Message: if we don’t change anything, the money will run down among others by the ageing. That’s why measures such as increasing the retirement age are introduced now. People who were 58 years of age or older on January 1st 2012 are allowed to retire when they turn 60, but those who were 57 or younger on that date must continue to work until they turn 65. If people wish to retire sooner, they will receive 6 percent less per year for the years in question. The AOV-premium will rise with 2 percent for employers, meaning they pay 9 percent now.

Minimum regulation
 
In the absence of his minister Hensley Koeiman (MAN), Victor Monk, sector director of the Ministry of Social Development, Employment and Welfare (SOAW), explained that increasing the AOV-age, (which for that matter was also 65 until 1971) is not sufficient. Too many Curaçao citizens are dependent on the AOV. The intention is therefore to introduce compulsory pension in 2014 as statutory minimum regulation for those who haven’t arranged anything with the employer.
 
According to an evaluation by the Committee Pension Scheme, in due course for this both employers and employees are to pay a compulsory minimum premium of 3 percent, therefore 6 percent in total. The compulsory pension will then come on top of the AOV, or a capital system is combined with a change system to spread the risks. The amount paid on pension premium one saves for oneself and the AVO-premium is for the current seniors. However, according to this evaluation, there will be a flexible scale arrangement for very high incomes, whereby the amount of the AOV-payment depends on the amount of the total income after retirement.

Social dialogue
 
The Council of Ministers decided that an advice on the compulsory pension must be ready by July 1st 2012. A committee will soon put the details of the regulation in writing. Representatives from the insurance system, besides the Chamber of Commerce, representatives of employers, employees and the government will attend this meeting, according to Steven Martina. “We’ve put quite a bit of pressure on the minister to participate with this consultation.” According to Martina, the measure that the government wants to introduce is ‘a fundamental change to the extent’ that this actually requires ‘a social dialogue first’.
 
Anyhow, in total the premium burden will increase considerably with all these changes. How are employers and employees to produce such and how will this effect the economy? Steven Martina: “Companies are to expand business through innovation and creativity. Employees really must understand that losing income now is an investment for the future.”

(Amigoe)