St Vincent and the Grenadines is targeting national insurance reform as early as next year, according to Finance Minister Camillo Gonsalves. The reform would address the pension and benefit structure of the National Insurance Services (NIS).
The finance minister stated that if no reform is implemented, the NIS reserves are projected to be depleted by 2034. The government’s intention is to implement NIS and pension reform in the budget year of 2024. This would ensure that the social security agency can continue providing essential services and avoid any last-minute drastic changes or fiscally imprudent interventions.
The 11th actuarial review of the NIS made specific recommendations, including increasing the contribution rate from 10% to at least 15% progressively over the next 10 years. The review also suggested reducing the maximum old age pension replacement rate from 60% to 55% and considering a shift from age pension to retirement pension.
These measures, along with other reforms, could extend the date of reserve depletion from 2034 to 2051. The government also plans to discuss reforms of the public pension system to enhance harmonization with the NIS arrangements. These reforms aim to improve the long-term sustainability of the public pension system. Over the next four months, the NIS and the government will continue consultations and public outreach to finalize a list of concrete proposals.