PM to Pay Close Attention to Recommendations
PHILIPSBURG:--- The Social Economic Council (SER) submitted an unsolicited advice entitled "A mandatory pension for Sint Maarten - an attainable and robust pension for all employees in Sint Maarten" to Prime Minister Wescot-Williams last week. Currently more than half of all employees do not have a pension additional to AOV. The advice proposes a mandatory pension for all employees currently without a pension with existing pension arrangements not being affected.
The advice entails that both employees and employers are obligated to contribute to the pension plan during the careers of workers. The minimum contribution of both parties together is 6 of the wage sum but both are free to contribute more, provided that employers contribute at least half in all cases. Employees and employers can deduct their premiums from wage- and profit tax. These contributions are recorded in a pension agreement with an insurer or pension fund. Employees have a say in the choice of the insurer and the pension agreement. Essential to the SER advice is that the new pension plan travels with the employee from job to job, eliminating most pension transfer problems.
The SER further advises that all the costs insurers can charge to execute new pension agreements are regulated by decree. This is to protect employer and employee from high overhead costs due to insufficient competition in the insurance market. Insurance companies can compete with the rate of return they offer in pension agreements.
Moreover, the SER advises to increase the existing tax deductibility for contributions to private pensions (annuities not related to employment) from 1,000 to 12,000 ANG yearly. Therefore, employees, but also independent contractors, can deduct private pension premiums in their tax return. This provides another incentive for Sint Maarteners to start planning for their financial future and not depend only on AOV. The SER stipulates that workers will need to save for their pensions; it is not given to them. After the publication in the National Gazette the advice of the SER will be available for downloading at www.sersxm.org.
The Prime Minister ha stated that the advice was well received and that close attention will be paid to it in the coming months.
From the Cabinet of the Prime Minister
