Sahadeo:

MINISTER in the Ministry of Finance, Christine Sahadeo, yesterday said legislation to allow workers to transfer their pension from one job to another will soon be brought to Parliament and is a top priority of Government’s ongoing financial sector reform.

In an interview yesterday, Sahadeo told Newsday that a common concern facing many employees who wish to change jobs is a loss of pension they could suffer in making that transition.

She said Government took note of this concern when it drafted its White Paper on Reform of the Financial System and the Financial Ministry is currently working on a comprehensive package of financial legislation, part of which will address issues pertaining to the portability and transferability of pensions.

According to the White Paper, pension benefits under the Civil Service Pension and Teachers Pension Fund are unfunded and are paid from Government’s general revenues while accrued liabilities on behalf of Government are “indeterminate at this time.” The White Paper stated a critical constraint in these pension plans is the absence of any provisions dealing with the issue of portability of individuals’ pension benefits which has served to “constrain the movement of employees into and out of the Public Service.”

The document added that in recognition of the need to modernise Trinidad and Tobago’s pension industry, Government formed a pension reform committee with a mandate to review the current pension regime and develop a detailed plan to reform this regime.

Sahadeo also said the issue of pension portability and transferability is engaging the attention of the relevant authorities in other jurisdictions. The minister’s view was supported by an October 25,2005 document from the European Union (EU) which articulated steps being taken to address this issue.

The EU document said the portability and transferability of pensions can eliminate barriers to labour mobility within a common economic space.

Portability is defined as the possibility of acquiring and keeping pension settlements in the event of professional mobility.

Transferability refers to one specific way of achieving portability, namely transfering a capital representing the acquired pension entitlements from one scheme to another.