Overview of Issues Raised
In April 2018 an act to establish a pension scheme for the public service came into effect. This act was called the Pensions (Public Service) act 2017 and the scheme was dubbed the Public Service Pension Scheme. This scheme dealt with matters concerning benefits and other allowances to be paid in respect of pensionable officers and other related matters. An article posted on the Jamaica Information Service website on January 22, 2022, titled Senate Passes Bill to Validate Approval for Early Retirement of JCF Members spoke about the approval of a new Act created to correct deficiencies in the 2017 Bill.
The article stated that members of the Senate approved the Bill which seeks to validate the approval granted by the Governor General for early retirement for members of the Jamaica Constabulary Force (JCF) during the period February 13, 2019 and August 13, 2019. It also stated that the current Bill covers action taken by those who facilitated the approval process consequent on the repeal of section 56 (1) (a) (1) and subsection (iii) of the Jamaica Constabulary Force Act relating to retirement. This section of the act stated that members were eligible for retirement at their option on or after the age of 55 years or 50 years with the approval of the Governor General approval after completing no less than 30 years of service.
The Bill was explained by Senator the Hon. Matthew Samuda who is a Minister without Portfolio in the Ministry of Economic Growth and Job Creation. He pointed out that 23 officers who retired during the period were affected. He also stated that the new legislation introduced changes regarding the eligibility for early retirement, thus, some members who were eligible were now not qualified for early retirement. So, in order to effect the approval that was granted by the Governor General for the early retirement of the 23 officers, legislation was drafted to make the approval valid and indemnify persons acting on behalf of the Government.
Description of Response/Action/Reaction of Government
The Government of Jamaica is responsible for setting up economic policy for the Jamaica Constabulary force (JCF). Therefore, when they reach the age of retirement, they will be able to provide for themselves. The Government has created organizations to oversee the pension of the JCF. Such as, Pensions Administration and The Jamaica Government Pensioners Association.
The Government has set up a department at the Accountant General Department that deals with the Pensions of JCF. This department is known as the Pension Administration. The Pension Administration Department is responsible for the Administering and processing of payments for JCF.
The Jamaica Government Pensioners Association is located at the Ministry of Finance and Public Services. The aims of this association are to make appropriate representation to the Government concerning matters relating to Pension and health benefits of the JCF.
In concluding, the responsibility, action, and reaction of the Government in correlation to the Pension of their citizen; is to make sure every citizen of Jamaica as access to funds after they are retired and enact policy to ensure that these funds are secured, protected and available for pensioners when they reach that age of retirement.
Identification of effects on Business, Governance and Society
(SrEc1AL early retirement – mof.gov.jm) Under the special early retirement program, anyone between 50 and 59 can obtain early retirement as ruled in the pension act. Over the years, early retirement programs have positively impacted businesses, governance and society. Early retirement gives businesses more incentives to invest in employees, focus more on training and create jobs for younger or more qualified people for development. It may also reduce the government’s cost in salary and benefits given to employees. The special early retirement program may reduce unemployment and provide future security for members of the JCF.
Whenever workers cannot get their early retirement, there can be many implications for society. Because the JCF members cannot reach early retirement, most workers may be disappointed and feel they need to be valued. Many individuals have been waiting years to be able to get early retirement. Some of them make plans for their early retirement, such as investing, participating in leisure activities, and working on a retirement budget. Not being able to do so can lead to them not enjoying their retirement years as they wished, a decline in the growth of the economy as their disposable income might not be enough to spend, and also lead to less social interactions as they will not have the time to socialize as they would if they had gotten early retirement. The law already states that once a person is of a certain age, they can receive early retirement benefits. The issue of JCF workers needing more support to get their help contradicts the law.
Regarding business (Age and individual productivity: a literature survey) shows that a significant decrease in productivity takes place from around 50. In Jamaica, that is the starting age for people to get early retirement. Early retirement allows businesses to experience more productive and knowledgeable staff. With more people over 50 working then, their efforts may decrease. Another rising discussion is how much technological enhancements may also affect older workers. Research shows that technology can affect businesses. With the advancement of technology in companies, most older workers need more effort in learning, which may result in a decline in productivity. The workers may feel less motivated and are less likely to continue working with the company leading to an increase in turnover rate. In addition, instead of giving out a one-off payment or monthly pension to early retired members, the businesses will still have to allocate money to pay them.
The government is also impacted by this financial constraint and faces various challenges.
The JCF is a government organization; this issue also affects the government. As stated earlier, older workers tend to work less productively. Less productive workers are more costly to maintain. At times the government increases wages and benefits, and as such, older workers are obligated to reap these benefits too. Not only will the government have to pay these workers, but it will also have to provide additional training to ensure that older workers are keeping up with new advancements. The most probable reason for the hold-up on early retirement is that society and businesses need to do more for the government to say they cannot get it. Hence, the reason for the financial constraint. The JCF needs to bring in more to be able to pay people. This means that the government is spending more than they receive from the JCF. So this is the strategy they will have to take to cut back or minimize losses, but in return, it affects everyone. The JCF will now have to find more ways or strategies to generate more funds to ensure their staff can get paid and feel their efforts are worth it.
The adverse effects of the Jamaica Constabulary Force’s new pension/early retirement law on the business sector and society are numerous. Firstly, the law will reduce the number of experienced police officers in the force, which could cause a decrease in the quality of law enforcement and public safety. This could lead to an increase in crime and a reduction of public confidence in the police. Secondly, the law could increase the cost of hiring new police officers, as training and equipping them will be higher than retaining experienced officers. This could strain businesses’ resources, as they may have to pay more for police services.Furthermore, the law could decrease morale among existing police officers, who may feel their hard work and experience should be valued and appreciated. This could lead to a decrease in productivity and an increase in the number of complaints against police officers. Additionally, the law may reduce the diversity of the police force, as older officers may be more likely to retire than younger officers. This could decrease public trust in the police force, as the public may not feel that the police represent their community.Finally, the law could harm the economy, as the pension payments to retired police officers will be taken from the government’s budget. This could lead to decreased public services and investment in other sectors, such as education and healthcare.
Overall, the adverse effects of the Jamaica Constabulary Force’s new pension law/early retirement law could compromise the ability of the government to achieve its goals. This could lead to a decrease in public safety, an increase in crime, a reduction of public confidence in the police, a decrease in diversity in the police force, a decrease in public trust in the police, and a decrease in public services and investment in other sectors.
To conclude, a hold-up on early retirement for JCF members affects the three major elements of a country. These are society, businesses and the government. Workers will become less productive if they cannot retire, companies will be pressured, and the government will have to continue paying wages to individuals whether or not their efforts are big or small.
Recognizing the issues in advance and communicating this to the relevant Stakeholders, there could have been meetings with union representatives to relay the issues being faced with the personnel officers who would have been affected by the budgetary constraints, and to mitigate confusion of the officers also communicating to them what to expect.
Another recommendation could have been to have a larger budget in place, than what was available for the first financial year of payout.
Implementing professionals for the proper management of this larger budget. For ex; financial controllers, FP&A, accountants, and the CFO. These can also include non-finance professionals like team leaders, department heads and other executives.
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