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Consider raising retirement to 65 years
T&T’s Government should consider raising the age of retirement from age 60 to age 65 said Dr Roger Hosein, senior lecturer, University of the West Indies (UWI).
According to statistics he provided, T&T’s population has been ageing for the last few years and, according to Hosein, to dampen pension pay-out rates and to reduce the dependency on the shrinking labour force, the T&T government should consider increasing the retirement age.
“Given that the economy is basically at full employment, there is now room for an economic argument—in the context of a change in the life expectancy—to raise the retirement age from 60 to 65. An intervention of this nature would increase the number of people who have great knowledge of the system remaining in the system and, therefore, the value added per dollar spent in terms of stock of knowledge on someone between the ages 60 to 65 may very well be higher than in the age 15 to 19,” he shared with the Business Guardian by email on Sunday.
In February, Finance Minister Colm Imbert said that increasing the official retirement age to 65 from 60 “is an important matter that requires careful consideration and discussion.”
Imbert was delivering feature address at the formal opening ceremony of the new corporate headquarters of the National Insurance Board (NIB) and stressed that pushing back the retirement age was not government policy and that no decision had been taken on the matter.
Hosein added that this does not mean that T&T should employ older people at the expense of younger people. Should the economy experience around five quarters of favourable economic growth—as is forecast with the coming on-stream of the Juniper project later this year—then a shortage of workers, as developed in the economy in the period 2006 to 2012, would return.
With regard to the ageing population of T&T and its relations to government subsidies, Hosein gave statistics to show that the Government’s total expenditure on pensions increased from $473 million to $3billion between 2000 and 2016.
The number of pensioners in T&T’s economy increased from 61,190 in 1990 to 90,800 in 2016.
“This is a very significant increase and has implications for the size of government total expenditure on pensions. The concern with the ageing population does not reside only with the rapid increase in pension payments. It also implies that the T&T labour would become top heavy. Thus between 1990 and 2016 quarter 2, the number of workers in the age group 15-19 and 20-24 fell by 25,100 and 14,800 respectively.”
To deal with the changing demographics, Hosein pointed to the St Kitts and Nevis model that could possibly used in T&T.
“This is something policymakers have to factor into their decision-making programmes and may point to the need for T&T to follow countries like St Kitts and Nevis and implement a citizenship by investment programme but only for people willing to invest approximately US$1 million here and actually be part of the labour force for the next 15 years.”
Ageing populations and its related problems are also issues faced by many countries around the world from Europe to Japan.
According to Hosein, the population of T&T has been growing very slowly. But, just as importantly, its distribution has been changing.
In 1962, 4.2 per cent of the T&T population was 65 years or older whilst 42.9 per cent of the population was between the ages 0-14 years.
By 2015, this had changed substantively with 9.23 per cent of the population above 65 years but with the population in the 0-14 years age group, declining to 20.68 per cent of the population.
Hosein said part of the reason for the change in the population structure is the falling birth rate in the T&T economy which fell from 32.4 births per 1000 of the population in 1962 to 14 births per 1000 of the population in 2015. The death rate has increased marginally from 8.37 deaths per 1000 of the population to 8.58 deaths per 1000 of the population, during the same time interval.
“Also note that the life expectancy of the population has been increasing (62.6 years in 1962 to 70.4 years, in 2015). Further, the net migration rates—which are available in five year intervals from the World Bank’s world development indicators—have been consistently negative, though noticeably falling, perhaps indicating the importance of the adhoc immigration into the T&T economy, from various places.”
‘Ageing in the Caribbean’
Studies done locally and regionally also raises similar questions.
In 2015, the book “Ageing in the Caribbean,”—edited by Dr Joan Rawlins and Dr Nicole Alea launched at UWI, St Augustine and hosted by the Institute of Gender—shows that by 2050, a quarter of Caribbean people will be 60 and over.
According to a T&T Guardian report, in the first chapter, Rawlins educates readers on how much life expectancy has improved.
In 1911, a Caribbean person was expected to live to just about 40 years, by 1960, this had leapt to 60-plus years and, by 2007, it was around 70.
The book also shares valuable research from 12 scholars from around the region, including T&T, Jamaica, Barbados, Guyana, the Bahamas and Suriname.
The 156-page book covers a wide span of issues: from grandmothers obliged to support adult children and grandchildren; to the challenges of maintaining quality of life when you live longer; to issues of affordable healthcare, protection from abuse, the loneliness experienced by too many old people, and the need for accessible, interesting programmes to encourage healthy, active ageing.