House bill 10-126-13 adopted in the first reading last week, seeks to bring private sector employees and employers into the government pension plan fund.
The bill findings stated that actuarial study conducted in 2019 on the government Pension Plan showed that by 2023 to 2025, current pension funds will be depleted. The bill further states that “it is of the utmost importance and critical to improve the sustainability of the fund and to do this, the Pension Plan must be restructured to provide defined benefit system for the employees of the public sector who already retired and defined contribution system for employees of public sector and private sector.”
Furthermore, the bill seeks to raise gradually retirement age to 65 by increasing by one year every five years until retirement age reaches 65.
The bill proposes a contribution of 3% by an employee and 3% by an employer with the employer withholding and remitting the employees share to Pension Plan Fund on quarterly basis.
The bill passed first reading and was assigned to Ways & Means Committee of the House of Delegates. (L.N. Reklai)