A CHANCE TO INVEST

The collective agreement reached between the Public Services Association (PSA) and the Chief Personnel Officer (CPO), under which public servants will receive a 15 per cent salary increase over the three-year period, 2002 to 2004, provides public service officers with the opportunity to break with the past.

Financial details, for example, what is expected to be paid out in retroactive increases along with the overall dollar increases which will accrue to public servants between (today’s) signing of the three-year agreement and its end next year, are still to be disclosed. But whatever the actual figures, the increases, what with the growing emphasis in Trinidad and Tobago today in mutual funds, direct involvement in the stock exchange, real estate and business development, will give the public service officers a chance to invest in their own and their country’s future growth. Recently, a precedent was set when thousands of former Caroni (1975) Limited monthly and daily rated workers, who were retrenched, invested their severance benefits in units in the Unit Trust Corporation as collateral for loans from the Agricultural Development Bank. The idea was worked out between the Bank and the Corporation, with planned for beneficiaries being not simply the severed workers, the UTC and the ADB but the country’s growth as well.

The 15 percent increase will translate into additional pension benefits for public servants when they retire, and an extra cost to be taken up by taxpayers. Increases negotiated by the Public Services Association have been steadily rising with each new industrial agreement. Clearly, unless there is a new approach to the question of how pension benefits will be addressed, both public sector salaries and/or wages and pension benefits will form an uncomfortably large part of the country’s annual Expenditure. Should there be a drop both in energy production and in international prices for crude and natural gas, Trinidad and Tobago will find itself in a difficult financial position. In turn, whenever the reserves are severely depleted, whether this takes place 50, 100 or 150 years from now, there will be the looming threat of social dislocation provoked by public sector layoffs, along with perhaps an inability to meet the cost of pensions. It would clearly be remiss of this generation to dismiss as not their concern, potential problems two, three or more generations from now to which it would have contributed.

Both the State and public sector unions need to discuss the question of replacing the present non contributory pension structure with a contributory pension scheme, under which monthly paid officers will fund their own pensions. This should not be viewed by public sector unions and their members as an imposition on public sector officers, particularly as well invested pension funds can, and have been known to provide much larger benefits than non contributory pension plans. Indeed, the contributory pension plan, will be as much an investment in their future by public servants and other public sector officers, as would the investment model demonstrated by former Caroni workers, only this time around, the difference being with their current and retroactive increases.