NEW UPM COALITION EARLY CHRISTMAS BOOST FOR PENSIONERS
By Staff Writer
In her first major move since assuming the role of leader of the newly formed United People’s Movement (UPM) coalition government, Hon. Premier Juliana O’Connor-Connolly seems set on fast-tracking a number of key pending decisions.
Among those highlighted are generous changes to the pensions scheme which will see an almost immediate increase in the public service minimum pensions by CI$300 from CI$950 to CI$1,250. Additionally, civil servants will benefit from a one-off payment of CI$1,500 in December. At the same time consideration is being given to reviewing the pensions of workers in the private sector.
“In the brief days since forming the UPM Government, I am delighted to say that the Government has worked cohesively and rapidly to address long-standing issues that enjoy widespread support and in some cases, unanimous support, across both sides of the aisle here in Parliament,” Premier O’Connor-Connolly said while making the announcement in Parliament.
She said these ‘policy initiatives’ which are being brought forward, will directly and positively impact the lives of Caymanian families.
“The UPM Administration is making inroads to deliver financial relief to three diverse groups across the Cayman Islands society who have been long awaiting decisions on key policies. I am happy to say that even in this first meeting, my Government is prepared to consider these matters that assist people within both the public and private sectors.”
Under the new UPM coalition, the first policies to come to fruition, include amendments to the National Pensions Act. The government says these are aimed at bringing urgent relief to families who are struggling to maintain home ownership, or in some cases to even access home ownership due to the rapid rise in interest rates in recent months.
However, this proposed change to the law will only apply to the private sector, as public sector pensions are structured differently, the Premier said.
Another policy change will financially benefit public servants and in particular retired public servants whose pension is below the level of subsistence provided through indigent care. As outlined by Premier O’Connor-Connolly, her UPM administration “is actively considering” amendments to the Public Service Ex Gratia (Uplift) Regulations to take effect in December.
This will provide relief to public service pensioners who worked for 10 or more years, by increasing their minimum pension to $1,250 per month. This is an increase of $300 per month, or 32%, over the current minimum pension guarantee of $950 per month.
The Premier said that “for those long-serving public service pensioners whose pension income is less than $1,250 per month, this one decision will bring much-needed relief allowing them to better cope with affording their bare necessities.”
The pension uplifts come just months after the previous PACT coalition under ex-premier Wayne Panton (the forerunner of the current UPM) had raised concerns about the state of the government’s finances before its demise. But new Premier O’Connor-Connolly sought to reassure that the new payments have been costed and accounted for, are justified, and won’t negatively impact the public purse.
“I know that there will be some who will criticize a payment to the Civil Service,” she observed. “To these critics, I say the truth is that we owe our Civil Service a tremendous debt of gratitude. Civil Servants are not only the delivery arm of every Government policy and programme, but in the current fiscal period of 2022 to 2023, efficiencies achieved by the Civil Service in the areas of personnel costs alone, have created the financial wherewithal to fund other Government initiatives that have benefited the wider Cayman Islands community.”
She also disclosed that current efficiencies and spending reductions elsewhere in the public service will more than adequately cover these new expenditures.
“In personnel costs alone, the Civil Service is forecast to achieve a total of $66 million in savings during the current fiscal period, which, broken down, accounts for approximately CI$40 million in HR savings in 2022 and a forecasted savings of approximately CI$26 million dollars this year.”
According to the UPM coalition leader, these savings have been reinvested to support working families across the Cayman Islands helping to pay for programmes like the electricity rebate, free school lunches and other measures introduced by the Government in the current fiscal period to help alleviate the cost of living.
Specifically regarding the approving the one-time payment of CI$1,500, Premier O’Connor-Connolly said the Government is allowing the Civil Service to retain approximately 10 per cent of the HR savings it has generated.
“I know that our colleagues across the wider public sector will ask questions about their eligibility. To them, I would say that in principle we have no objection, but it is important to take note that this outcome is funded by efficiencies and not the result of the Government needing to approve new funding and that this is in lieu of other performance incentives at this time. Therefore, the litmus test is in savings; if they can be found and no new funds are required we have no objections.”