Statia Government Guesthouse
ST. EUSTATIUS--Unions of the organised consultation and the mandated employer on behalf of the Ministry of Interior Affairs and Kingdom Relations BZK reached a negotiation result on the pension scheme and the employment conditions for central government civil servants in the Caribbean Netherlands for a period of three years on Wednesday, May 19.
An important subject during the negotiations was pension accrual. This is under pressure due to the worsened economic situation and the interest rate development that goes with it. With the low interest rates, the executive organisation of the Pension Fund Caribbean Netherlands can no longer realise the agreed pension accrual of 1.75 per cent per year. This is necessary to achieve an income at retirement age of about 70 per cent of the average salary for 40 years of service.
Under the current pension scheme, employees could face an enormous loss of income when they retire. To prevent this, the negotiating parties came to the following agreements: an increase in the retirement age to 66 as of 2030, a limitation of pension accrual to a maximum annual income of US $47,500 and a modernisation of the disability pension. This will prevent the decline in income over time and the pension contribution does not have to be increased.
In addition to the measures to preserve the agreed pension, the unions have reached a negotiated agreement with the mandated employer for a three-year benefits package. This package includes a one-time payment in 2021, a reduction in working hours to a 36-hour week and an allowance for civil servants in high-risk professions, starting in 2022.
Through the reduction of working hours, approximately 50 new jobs will be created on the three islands in the Caribbean Netherlands. This was very important for the unions and employers to realise, especially because of the economic consequences of coronavirus COVID-19.
The parties involved concluded that at the negotiating table a balanced result was achieved which can now be presented to the union members.
