Premier Juliana O’Connor-Connolly came bearing gifts for Cayman’s public service pensioners and civil servants Thursday night as she announced increases in pension payments and a one-time bonus for government workers.
O’Connor-Connolly, in her inaugural speech as premier in Parliament Thursday night, said her United People’s Movement administration has approved a one-time $1,500 payment for civil servants in December and a bump in public service pension payments.
Speaking to the $1,500 for civil servants, the premier said that the bonus will be processed as a one-time payment in December.
Deserved payment
She acknowledged that there may be critics of the bonus payment, but said “we owe our civil service a tremendous debt of gratitude”.
The premier said personnel costs in the civil service are forecast to register savings of $66 million during the current fiscal period – approximately $40 million in human resource savings in 2022 and about $26 million in savings expected this year.
“These savings have been reinvested to support working families across the Cayman Islands helping to pay for programmes such as electricity rebate, free school lunches and other measures introduced by the government in the current fiscal period to help alleviate the cost of living.
“By approving the one-time payment of $1,500, the government is allowing the civil service to a retain approximately 10% of the HR savings it has generated,” she said.
Describing the approach as “sound,” the premier said it rewards the contributions of civil service and it incentivises continued efficiencies.
“But it’s important to note that this outcome has been funded by efficiencies, and not the result of government needing to approve a new funding, and that this is in lieu of other performance initiatives at this time,” she said.
Pensioners assistance
Government, she said, is considering amendments to the Public Service Pension (Ex-Gratia Uplift Payments) Regulations to offer relief to pensioners through an increased payment.
“Once finalised, the policy will come into effect in December 2023 and will provide relief to public service pensioners who worked for 10 years or more by increasing their minimum pension to $1,250 per month. This is an increase of $300 per month, or 32% over the current minimum pension guarantee of $950 per month,” she said.
The premier, who is also the minister of finance, explained the reasoning behind the new policy for pensioners, saying that government could not apply the pension changes passed in Parliament Thursday to public sector pension funds as they are structured differently.
“This one decision alone will bring much needed relief, allowing [public service pensioners] to better cope with affording their necessities,” Premier O’Connor-Connolly said.
“Civil service terms and conditions are in fact reserved responsibilities for the governor and deputy governor,” she said.
However, she said, government knew the plight of many public servants and “in particular, retired public servants who faithfully served for many years, but whose pension is below the level of subsistence provided through the indigent care”.
To address this, government decided to move forward with the increased pension payments.
“This one decision alone will bring much-needed relief, allowing [public service pensioners] to better cope with affording the bare necessities. I am indeed relieved that not only has this policy decision making been taken quickly by the UPM government, but will also be implemented quickly as well,” she said.
The Public Service Pension Board, the premier said, has confirmed that eligible pensioners will receive their first payment in December, ahead of the Christmas season.
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