NASSAU, BAHAMAS — The government is considering raising the national retirement age to 67 as part of efforts to strengthen the long-term sustainability of the National Insurance Board (NIB), with Labour and Public Service Minister Pia Glover-Rolle noting that retirees who return to work while collecting pensions are placing additional pressure on the fund.
Speaking at the 20th Annual Exuma Business Outlook conference on Thursday, Glover-Rolle revealed that proposals under consideration include increasing the minimum retirement age from 60 to 62 and the regular retirement age to 67. She also disclosed that another increase in the national minimum wage is anticipated in the near future, with the National Tripartite Council already reviewing the issue.
The minister stressed that retirement age reform has become increasingly urgent as the government seeks to address NIB’s financial sustainability without imposing additional contribution increases on workers and employers.
“In the Bahamas, we are looking at raising both the minimum, which is the 60 and the regular retirement age. That is going to be for public consultation,” Glover-Rolle said.
“The National Tripartite Council, which represents all of our stakeholders, the government, employers and employees will have that dialogue to see what is the most feasible. Many numbers have been thrown out. One that is sticking is 62 and 67, 62 at the minimum, 67 at the higher.”
Glover-Rolle also highlighted the financial implications of employees retiring from state-owned enterprises at age 60 and subsequently returning to the workforce while continuing to collect pension benefits.
“We also understand that our SOEs, our state-owned enterprises have retirement at 60, which is also affecting the fund in terms of the national insurance,” she said.
“We look at older workers who want to return to work, who’ve retired and asked to come back to work. They are collecting a pension along with a salary, and that’s what’s affecting the sustainability of the fund.”
The minister did not indicate how many retirees are currently collecting pensions while employed or quantify the financial impact on NIB.
She emphasized that the proposed changes remain subject to public consultation, but expressed hope that a decision could be reached without prolonged delays.
“So it will be for public discussion. I hope that we can swiftly get to a place where we make a decision as a country. I will be driving that, but it’s something that has to happen sooner rather than later if we are going to circumvent the issue of having to raise ceilings,” Glover-Rolle said.
The minister noted that discussions about extending retirement ages are taking place internationally as populations age and more individuals remain economically active beyond traditional retirement ages.
She said the National Tripartite Council, which brings together representatives of government, employers and employees, will play a central role in determining the most appropriate approach for The Bahamas.
Glover-Rolle stressed that extending the retirement age forms part of a wider strategy to improve NIB’s financial position, including investment diversification, stronger contribution collections and greater returns from the institution’s existing assets.
She revealed that she has instructed the newly appointed NIB board to explore alternative revenue-generating opportunities before considering further contribution increases.
“So, basically, I’ve said to the board, as opposed to going back to the people and asking for an increase in contributions, we should see how we can grow our funds through investment, diversifying our fund, and ensuring that we look at other means of sustainability,” she said.
“In regards to our real estate assets, how do we develop them and make them revenue-generating properties that will serve the board? My last option is to go to the people and ask them to give more.”
The minister acknowledged that actuaries have repeatedly recommended higher contributions as a principal means of strengthening the fund, but made clear her preference for exploring other options first.
“We have to be creative and understand as we look at the National Insurance Board’s sustainability,” she said.
She added that the government is examining opportunities to diversify NIB investments beyond The Bahamas while making better use of the institution’s substantial real estate portfolio.
“What are we doing in terms of investment in the National Insurance Board to diversify outside of our country and see how we can grow our fund?” she asked.
“And how are we using our investments in terms of our current investments, real estate, to ensure that there is growth, to ensure that there is sustainability, and to ensure that we are making the fund’s money work for the people?”
Glover-Rolle also floated the possibility of allowing contributors to make additional voluntary payments into NIB to increase their retirement benefits, although she acknowledged that the proposal remains an idea rather than an established policy.
“If we’re talking about a contributory pension now for government, why can’t national insurance be contributory if you decide that you want to add more to your fund to be able to benefit more at the end?” she asked.
“That’s just a wild idea I have. Now I have to sell that to everybody else.”
Meanwhile, the minister confirmed that another national minimum wage increase is being contemplated, with discussions already underway through the National Tripartite Council.
“But in terms of the minimum wage being raised, that is something that the conversation is already being had, and we do anticipate another increase in minimum wage in the near future, even before we get to the place again of a livable wage,” she said.
Glover-Rolle explained that the government is considering establishing a wage-setting council to ensure future increases are informed by economic data, productivity and skills rather than arbitrary adjustments.
“We are, through the National Tripartite Council, looking at the wage-setting council as opposed to just randomly and ad-hocly raising the minimum wage, but looking at a wage-setting council that will take into consideration productivity, that will take into consideration skills, and that will take into consideration where we need to go in terms of a livable wage as opposed to a minimum wage,” she said.
The minister stressed that productivity and compensation must be considered together, while acknowledging concerns among workers who believe they are underpaid.
“We want to use empirical information, we want to ensure that it’s data-driven, and we want to ensure that all the stakeholders are a part of it,” she said.
She also confirmed that work on the proposed National Productivity Council is progressing, noting that the Productivity Task Force completed its work on establishing the council’s parameters in February.