Memo: Civil service wage cuts this month

Salary, pension cuts ordered

Proposed wage cuts, health care
payment increases and an immediate pension “holiday” for Cayman
Islands government workers are all being planned to take effect
this month, according to an interoffice memo obtained by the Caymanian Compass.

In the document, Financial
Secretary Kenneth Jefferson writes that the combined cuts and added health care
costs, if they materialise, would reduce government’s operating deficit by $17.3 million to $44.4 million by the end of the current financial
year (30 June).

The operating deficit by year’s end
was recently projected at $56.1 million, but the memo – which was dated
Thursday – puts that estimate at $61.7 million.

In addition to the wage-related
reductions, government has asked all heads of departments to reduce
non-personnel costs by 15 per cent in the current year’s budget. Proposals for
those budget cuts are expected to be submitted by Wednesday.

To decrease the budget deficit, the
following measures were to take effect for the March pay period:

*Salary cuts for all civil servants
making $3,000 or more per month. (five per cent for those making $3,000-$4,499;
ten per cent for those making $4,500-$9,999; and 15 per cent for workers making
$10,000 or more per month). Elected members of the Legislative Assembly would
also have to take a 20 per cent pay reduction and the Premier will receive a 30
per cent pay cut.

*A “100 per cent” pension holiday
for civil servants and employees of statutory authorities and government
companies. Some legislative changes would be required, as Cayman
Islands law currently states that a 12 per cent of salary contribution
must be made toward government workers’ pensions each month.

*All public servants making $3,000
or more per month would have to pay 50 per cent of their health care costs.
Those costs range from about $350 per month for single workers to more than
$1,000 per month for employees with families.

“The government has decided that
the entire public sector (central government and SACGs – statutory authorities
and government companies) is required to implement, effective for the March
2010 pay date, the remuneration – reduction strategy,” Mr. Jefferson’s memo
states.

Government officials also requested
that the Cayman Islands Civil Service Management Council consult with
ministries, portfolios and statutory authorities to provide “a collective view
on this decision”.

The Compass contacted civil service
association leaders, who declined to comment immediately. We’ll have more on
this story for Monday’s editions….

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4 COMMENTS

  1. This will never work, any money saved by reducing
    people’s salary will immediately be lost by the cost of hiring and bringing in new staff to replace those who will quit due to this substantial hit to their pay cheque.

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  2. So what happens to the local economy when these people no longer have the money that they would normally spend at local businesses? A decision like this will affect everyone’s pockets. I already feel sorry for the small business owners as (besides the civil servants) they will likely be hit the hardest.

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  3. For a family of 4 – 2 adults and 2 school kids insured through CINICO, you are talking $1000 in health insurance PLUS the 5/10/15% cut. Potentially a 30% (depending on your salary scale) decrease in pay. And you apparently can’t opt out! There are tough time acoming!

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  4. So how do you change the terms of a contract to that extent for those civil service employees that have them? Doesn’t that make them null and void and/or open for litigation? I agree with the above comment. Good luck saving money when you are busy spending money replacing the exodus of people leaving the civil service.

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