by Linda Straker
- Public Sector Employees Pension Act went into effect on 1 January 2025
- Public officers contracted for truly vacant positions by PSC for last 3 1/2 years, will not be seen as new employees under act
- Workers in that category will be covered under 1948 pension legislation
Prime Minister Dickon Mitchell in his capacity as Minister for Public Administration has informed the Lower House of Parliament that public officers who had contracts for truly vacant positions in the public sector and were contracted by the Public Service Commission (PSC) for the last 3 1/2 years, will not be seen as new employees under the Public Sector Employees Pension Act which went into effect on 1 January 2025.
Responding to questions about the act submitted in the House of Representatives by Opposition Leader Emmalin Pierre, the Prime Minister, in his written response, said that workers in that category will be covered under the 1948 pension legislation.
The question from Pierre was: “Would a nurse who was on a Public Service Commission contract for the last 3 1/2 years in a truly vacant position be considered a new public sector employee for the purposes of the Public Sector Employees Pension Act? Which pension arrangement would this worker qualify under?”
His answer: “No. A nurse or any other public service employee who has been engaged on a Public Service Commission contract for the last 3 1/2 years in a truly vacant position would not be considered a “new public sector employee” for the purposes of the new Public Sector Employees Pension. These workers will be covered under the old pension arrangement.”
Pierre further asked, “Should the fund run into financial problems, does the law provide for a government guarantee on the pension to the member?”
The Prime Minister answered: “The New Pension Plan adopts the Defined Contribution design; therefore, there is no risk of the fund experiencing financial problems, as it’s a Defined Contribution plan. All assets are calculated for individual members, and so the goal is to make sure that the fund achieves market rates of return. There is no contingent liability for the Government of Grenada once the full Past Service Credit has been paid as approved.”
Pierre sought further clarity about the 1958 pension law by stating, “The 1958 Pension law allows for 66 2/3% of the worker’s last salary. Does this pension scheme guarantee a percentage amount of the workers’ last salary? If so, what is the percentage, and which section of the law can this information be found in?”
The Prime Minister answered: “The new pension plan does not guarantee any minimum or maximum replacement rate. As a defined contribution plan, each member’s contributions (employer/employee/volunteer) accumulate with interest. Upon retirement, the amount accumulated in the member’s account will be available for drawdown or purchase of an annuity.”
Pierre then sought clarification about a specific group of workers. She said, “Section 3 (1b) Subsection ii of the pension law excludes a specific group of workers based on set criteria. Please advise which law covers people falling in this category?”
The Prime Minister responded: “Employees who have neither attained the age of 50 years nor have been employed with the Government for a period exceeding 15 years and are not eligible to receive a pension, gratuity or other allowance in accordance with a relevant enactment are covered under the new public sector pension act.”
Further, he said: “Employees of the Government who are currently employed in the public service for a period exceeding 15 years and are 50 years of age or older are entitled to the ex gratia monthly payment based on Cabinet Conclusion#1221 of 22 June 1988.
Temporary employees: These employees will be covered under the new pension act upon confirmation. People who are seconded from statutory bodies or government agencies with established pension arrangements will be covered under these arrangements.”
Pierre’s final question centred on the transitional agreement for the collection, management and administration of the fund. She asked, “The government has announced the commencement of the deductions from the members/workers. In the absence of the institution established in the law for administering the fund, what is the transitional arrangement for the collection, management and administration of the same?”
The Prime Minister answered: “Cabinet Conclusion #111 provides for the Department of Public Administration to serve as the interim fund administrator. The contributions deducted from 1 January 2025 are being deposited into a special bank account established for this purpose.”