(CNS): The deputy governor has said that members of the civil service are “overwhelmingly in support” of legislative changes that pave the way to allow government workers to stay in their jobs and the public service pension scheme until they are 65 years old. Franz Manderson presented two amendment bills to parliament Friday that will change the Public Service Management and Public Service Pensions laws to extend the working lives of civil servants and allow them to save for their retirement for longer. Although not compulsory, the head of the service is expecting a high take up.
Manderson said that even before the law has changed, around 90% of civil servants who became 60 years old in 2014 had opted to stay in their jobs in the preliminary transition period the service introduced ahead of the planned legal changes.
“Even without compulsion most people are choosing to work longer,” he said, explaining that at present they cannot pay more into their plans but the change in the law would allow that to happen. Civil servants that have or will opt to stay on post 60 until they are 65 will be able to suspend taking their pension and re-enter the scheme to accrue more savings.
Manderson told the Legislative Assembly, which supported both bills, that with the changes in life expectancy, civil servants wanted and needed to have longer working lives. He said increased retirement is happening the world over; it has been changed in the private sector in Cayman and one of the recommendations in the EY Project Future report was an increase to the public sector working life term.
Following an extensive education campaign in the service, the majority of workers were very much in favour, Manderson said, as he outlined the benefits. This included the retention of experience and talent within the service and allowing productive members of society continue to be productive, to earn more for longer and to save more in their pension schemes.
Although it will not be a huge addition to the pension pot, the five extra years of payments would make a gradual difference and help dent the past service liability of the government pension scheme, Manderson said.
While keeping senior people in the service longer may delay the promotion of younger public servants, other changes to the Public Service Management Law would allow for some flexibility in the service, with targeted transfers and for older workers who retain their pay grade to take less demanding roles if they want.
With succession planning in the service an important factor and pressure to reduce the overall government headcount by some 11%, which Manderson said had to be a gradual process, as head of the civil service he now has the right, in specific circumstances, to move staff around to allow talented younger workers a chance to advance.
But the most important factor in changing the law was to give government workers an extra five years of earnings and accrue more payments into their pension, increasing savings and improving the chances of a more stable, independent retirement.
Manderson pointed out that people may want to retire but they simply cannot afford it, as he debunked what he said were misconceptions about civil servants living like kings and queens in retirement.
The DG also revealed that the average age of the civil service is currently 43 and more than 5% are now 60 or over. But with a quarter of government workers aged between 50 and 59, the service has a significant pool of seasoned, experienced and talented staff that it does not want to lose.