By: Omar Silva, NP Staff Writer

Belize City, Friday, 17th March 2023

Belize is taking bold steps to reform its pension plan for public officers, which has been deemed unsustainable and unfair by the country's Prime Minister, John Briceño. In a bid to address the country's ballooning pension liability, the government is set to introduce a contributory pension scheme, which will commence on July 1, 2023, for new entrants into the Belize Public Service.

According to the IMF, pension liability in Belize currently stands at 77% of GDP, outweighing the entire public debt of the country. As a result, the IMF has recommended that the retirement age of 55 be increased to 65 under the new contributory scheme. The government has also been advised to reduce the replacement rate from 67% to 50% to bring it in line with regional standards.

Belize's policies on retirement age, replacement rate, and contribution rate have been described as an "outlier" by Prime Minister Briceño, who believes that the current spending on the pension plan is neither sustainable nor fair. As it stands, the replacement rate for public officers in Belize is 95.4%, which is significantly higher than the regional average of 61.9%.

The new contributory pension scheme will see a contribution rate of 10% of wages, half of which will be contributed by public officers. The government aims to make the existing Public Service Pension Scheme more effective, efficient, and sustainable through a comprehensive review in phase two of the reform.

The Joint Union Negotiating Team has shown support for the government's plan, which is seen as a historic moment of unprecedented collaboration and achievement. A working group inclusive of the government, JUNT, the National Trade Union Congress of Belize, GAMAS, and the private sector will be established to execute this task.

With the government forecasted to spend approximately $100 million on the pension plan for public officers in the upcoming fiscal year, the introduction of the new contributory scheme is a significant step towards addressing Belize's pension liability and ensuring a fair and sustainable pension plan for all.