You must serve for three terms to get a full pension.
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Introduction
On Tuesday, May 28th, the Premier of the Turks and Caicos Islands, Honourable Charles Washington Misick was a guest on Financially Speaking show, a show that I host every Tuesday on Radio Turks and Caicos.
During the show, the Premier announced that the Government has made a proposal to change the terms of the pensions for parliamentarians. I was so pleased to hear this because I am one of those people that believe that our current pension plan for parliamentarians is too generous and unsustainable.
Current Pension Plan
Currently, once you serve for two full terms in Parliament and you have reached the age of 50, you are qualified for a pension by the Government. They can get it younger than 50 if they have medical proof of being incapable of serving as a legislator due to permanent infirmity of the mind or body. The parliamentarian gets paid for life monthly at a rate of 2/3 of the highest annual rate of the basic salary paid to the member of parliament. The Parliamentarian can also opt to receive a one-off gratuity payment, but the life monthly retirement allowance will be reduced. The reduced retired allowance is calculated at a rate of ¾ of the regular retiring allowance and the gratuity is calculated at the rate of 12 and ½ times the annual rate of the reduced allowance.
Proposed Pension Plan
The Premier did not give too many details about the pension, but he did state that the proposal is that to get the full pension, a parliamentarian must serve at least three terms in Government. I believed three terms was what it was before, but it was changed to two terms. Despite many people advocating for Governments to change the plan to what it was before, no Government attempted to change it leaving a lot of us wondering if successive governments endorsed the 2-term plan for pensioners. I am very encouraged that the Government has submitted a proposal to change the pension plan. The Premier stated that an actuarial assessment must take place, which he believed has already started. He also said the Integrity Commission also must play a part in the process.
The Premier also stated that if you served two terms in Government, you will still be qualified for a pension, but you will not get a full pension. To get a full pension, you will need to serve three terms.
Conclusion
While I am happy that a government is finally reviewing the pension plans, it is still my belief that parliamentarians do not have to be treated any differently from the civil servants or the regular beneficiaries of our National Insurance Plan.
Civil servants do not qualify for pensions from the Government until they reach the age of 60. The retirement age for National Insurance is 65. Of course, you can retire at age 60 but you will not get the full benefits.
As mentioned, I don’t have all the details about the proposed parliamentarian pension plan but once those plans are released, I will address it again. I hope that the actuarial assessment does not take forever because, based on my understanding, this proposal has been floating around for the last two years.