Pensions a topic of debate in Falkland Islands Legislative Assembly
Written for the December 17, 2021, issue of Penguin News. Printed under the headline “Pension issue creates friction in meeting of Legislative Assembly”.
THE issue of retirement pension in the Falklands came to the forefront this week at meetings of the Standing Finance Committee (SFC) and Legislative Assembly respectively.
MLAs and government officers hotly debated the Retirement Pension Christmas Bonus, a generalised increase of OAP payments to pensioners, and concerns regarding conflation between the two and how best to assist pensioners who aren’t receiving payments equivalent to a living wage.
Discussion began in the SFC on Wednesday with a paper submitted to recommend an increase to the Retirement Pension Christmas Bonus of 2021 from £163 to £200, which was largely supported by members. Concerns were raised, however, that the increase was not enough and was “tokenistic” and “presentational,” in the words of MLA Leona Roberts.
MLA Gavin Short, in SFC, came with a “counter-proposal” based off of a 1% increase to weekly payments compounded into the singular bonus at Christmas of £247.76 - at a cost of roughly £35k to FIG. This, in itself, was later referred to by MLA Barkman in Legislative Assembly as being a “significantly tokenistic” gesture by Mr Short.
The “counter-offer” by MLA Short was not approved by the SFC as it was said to be conflating the rate of pension in general, and concerns surrounding pensioners not receiving something resembling a living wage, with the one time gift of a Pension Christmas Bonus.
In Legislative Assembly on Thursday MLA Short raised again the topic of Retirement Pensions, asking the Financial Secretary, Tim Waggot, what the cost would be to the exchequer for an increase in the retirement pension of 3% and 5% respectively, should such an increase be agreed and back dated to the beginning of the financial year.
Financial Secretary Tim Waggot responded; “whilst the Treasury team was able to provide the Budget Select Committee a broad brushed estimate of the long-term cost of increasing pensions above the rate of inflation my professional advice was that this not a sufficiently robust calculation upon which to base decisions that have far reaching long-term financial consequences.”
The Financial Secretary noted that actuarial reviews of the Pensions (Old Scheme) Fund as at 30 June 2021 and the Retirement Pensions (Equalisation) Fund as at 31 December 2021 were impending, to be “undertaken by specialist actuarial firms, themselves staffed by experienced and qualified professionals with a substantial background and experience in the production of such analysis and recommendations to many pension schemes across the globe.”
In discussion among MLAs following the prepared response by the Financial Secretary MLA Barkman asked: “Would a change from three to five percent really help people in hardship? And for the hundreds of people that are affluent and that wouldn’t necessarily benefit too much from that [increase], is it right that the taxpayer bear the cost of that for the rest of their lives?”
This same point had been voiced by the Financial Secretary in the meeting of the SFC on December 15, where he said: “If you conflate the 413 pensioners with those people who may be below the current level of living wage that is well researched, evidenced and confirmed previously by the house, then you’d be giving more money to well over 300 people that are actually over that living wage.”
MLA Barkman noted in Legislative Assembly that “a bonus is a temporary band-aid” and that “a long-term solution to making sure no one falls below the poverty line needs some serious work behind it, and probably isn’t going to be achieved either by the suggestion my Honourable Colleague is making about uplifting the OAP by two percent.”
MLA Pollard added during discussion in Legislative Assembly that “there was a clear issue” relating to pensions and “that there are some members of this community who are suffering.”
To this he said that “we can’t make arbitrary changes to the pension amounts, but I think we need to understand exactly what this issue is” and “how many people are falling below this sort of poverty line.”
MLA Pollard concluded “I don’t feel directing people who have worked all their lives or have not been able to set aside a huge amount of money during their lifetime should necessarily be directed towards the welfare system.”
Regarding the process to identify a solution MLA Barkman said “As we’ve explored during the Covid-19 recovery work we can identify people in hardship in our community.
“It takes effort and it takes strategy, and I do believe that we can come up with a suite of policy options to make sure that in our community people who have worked all their lives don’t have to go to welfare but can be picked up separately and supported.”