By: Eoghan Olkeriil Ngirudelsang
Koror, Palau – President Surangel Whipps Jr. is proposing changes to Palau’s Social Security system that would raise the retirement age for younger workers and increase Social Security (SS) contributions from 7% to 8%, starting October 1, 2025.
The proposed changes are part of the proposed Fiscal Year 2026 national budget bill now before the Olbiil Era Kelulau (OEK), and include amendments to Title 41 of the Palau National Code. One of the major changes is a gradual increase in the retirement age, depending on when a person was born.
Under the proposal:
- People born on or before September 30, 1965 can still retire at age 60.
- For those born after that, retirement age goes up by six months for each birth year.
- Anyone born after October 1, 1974 would retire at age 65.
At a press conference this week, President Whipps said the proposal does not force anyone to keep working. “This regulation will not stop anyone from choosing to stop working and retire at any age they prefer,” he said.
However, the proposal does not clearly say whether people who retire early will still receive full benefits or if they will need to wait until their assigned retirement age. Under current rules, people who retire early—before the required retirement age—must wait until they reach age 60 to begin receiving their retirement benefits, whether they are in the Social Security or Civil Service Pension programs.
Whipps said that raising the retirement age is meant to give people the option to work longer, especially as people live longer today. He added that the Social Security Board and the Civil Service Pension Plan Board will be responsible for deciding how retirement benefits will be paid under the new rules.
Judges and people in key positions exempt from civil service rules will not be affected by the new retirement age.
The proposed 1% increase in SS contributions will apply to employees’ paychecks starting October 1, if approved by the OEK.