Melissa Doughty
Old age pensions are the topic of global conversations about rising fears that as people age, those schemes can’t be sustained. It is referred to as the Pensions Crisis.
From as early as 1999, British economist John Eatwell spoke to The Anatomy of the Pensions Crisis in an economic survey of Europe.
A 2022 Harvard Business Review article said, according to UN reports, two-thirds of the global population lives in countries with below-replacement fertility rates, while average lifespans continued to grow.
That meant many populations were rapidly ageing, and would begin to shrink, it said.
This is also a looming issue for the TT government. The Central Statistical Office, in its June 30, 2022 mid-year population report, estimated TT’s 65-plus population at 122,412.
One provision for people over 65 in TT is the Senior Citizens’ Pension.
The Ministry of Social Development and Family Services’ website says the pension is a grant accessible to citizens over 65, who must have lived in the country for 50 years and have a monthly income not exceeding $5,500.
To receive the grant, one must fill out an application form, then attend an age-assessment meeting with the Local Public Assistance Board. The ministry’s welfare officers do a means test for eligibility for the grant. The board then decides on the application.
Minister: Government pension not for all
Social Development and Family Services Minister Donna Cox said to give every citizen who turned 65 a pension would be unsustainable.
“How sustainable would it be if we just gave everyone who wanted a pension one?”
There are 105,000 people receiving a pension from the ministry, she said.
And there are more to come. Through its centenarian programme the ministry has recognised that many people are living longer. This is a factor in the sustainability of the pension fund.
The Government aims to continue taking care of TT’s senior citizens, but thinks some people might believe they are entitled to it.
“That is not the case. The pension is intended for people who are vulnerable. You are finding people applying for pension and are people who are landowners, homeowners and wealthy but feel they should still receive that $3,500,” she said.
But in fact, “Everything that comes out of the Ministry of Social Development and Family Services is for the vulnerable. It is not for people who have.”
“We know there are many people on the system that should not be there,” Cox added.
The ministry was hoping to correct this through its ongoing digitalisation efforts.
The grant is targeted at widows, domestic helpers, single mothers and people who were not employed throughout their lives.
“If you are receiving the National Insurance Scheme (NIS) and it is the same amount as the old age pension, then you do not get it. It means you worked somewhere, and you are entitled to NIS,” she said.
Retirees: crunching the numbers
It’s not only sustaining the system that concerns government officials, but also the actual use of the funds.
Cox said her ministry had found people who were not being taken care of by family and caregivers. The ministry was “beefing up” inspectors in its Division of Ageing to address this problem, she said.
“There are children who are living on their parents’ pension when they can work. They should be taking care of their parents and not having to depend on a pension.”
She said the ministry would also host seminars for caregivers on how to care better for the elderly, including their financial health.
General practitioner and gerontologist Dr Lorraine Patience pointed out another consequence of an ageing population: “When you reach 80 or 90, your children have now reached the end of their working lives and having to support their older parents, plus now looking to be able to support themselves on their pension.
“So it has a big knock-on effect.”
She believes many societies will have to overhaul pension systems as people live longer.
“If people stop working at 60-65 and they are going to live to 100-plus, there is no way that you are going to be able to sustain the pension schemes as they exist now.
“It cannot continue as it is, it is what do you develop it into?”
The Government cannot say a pension will only be paid until someone reaches 90, because that was unethical, she said.
Patience…
Read More: The pension problem: Ageing population, fewer workers raise concerns about