With all that’s been going on, today’s report on findings of the General Audit Chamber regarding the general pension fund APS should not remain unnoticed. The drop in coverage ratio from 97.6 in 2014 to 93.2 per cent a year later is considered worrisome.
Moreover, the return on investment for 2015 was just 0.39 per cent and the average since 2011 4.29 per cent, still well below the 5.5 percent long-term standard in APS’ own policy. While some of these disappointing results may have to do with developments abroad, the Chamber mentions several local factors.
One of the latter is invoicing premiums of 22 instead of the legally required 25 per cent, which has been rectified meanwhile per January 1, 2016. In addition, payments of NAf. 19 million for the sale of the new Administration Building and NAf. 60 million based on the division of Netherlands Antilles assets remained pending when the report was drawn up.
However, Finance Minister Richard Gibson said on Wednesday that the Committee for Financial Supervision CFT had sent a March 2 letter to the Kingdom Government indicating that its 2015 instruction to St. Maarten had been “substantially complied” with (see related story). The four items included clearing backlogs in health insurance and pension premiums as well as anchoring these in the budget and ensuring the financial sustainability of the funds.
The latter will take legislation, added Gibson, to be passed by Parliament. The good news seems to be that an agreement reached between Government, public sector unions and APS to reform the pension system may lead to the fund’s sustainability. However, it involves austerity measures such as increasing the pensionable age to 65 and reducing the minimum participation age to 18.
Taking into account the ageing population and what’s happening with similar systems all over the world, these proposed changes don’t seem unreasonable and are apparently necessary. It’s all about acting now to safeguard pensions for the future.
