FRIDAY, FEB. 23: Government is counting on pension breaks to help cut the island’s debt, protect jobs and boost spending as it waits for economic recovery in the US and Europe.
Premier and Finance Minister Paula Cox said that – in line with proposals to take a pension contributions holiday for a year in the public sector – private sector workers can also opt out of their pensions schemes for a year.
Ms Cox said: “It’s important to sustain jobs as our economy heads towards recovery. There was a time not so long ago when companies did not have to provide pensions to their employers. Now they do.
“However, we must recognise that employers are under pressure and as our economy heads to recovery we must reduce pressures on companies that will cause them to shed jobs.
“This is a temporary measure that will provide temporary relief to employers and provide additional income to employees.
“Additional income to employees provides stimulus for our economy. Stimulus leads to growth and creates jobs and that is what our economy needs.”
She added: “If the suspension of contributions is taken up across the private sector, it will provide both relief and stimulus to families and businesses.
“The stimulus to the economy will be generated if some of the saving is converted to consumer spending in the local economy and business investment in infrastructure and improvements.”
Announcing the Budget in the House of Assembly today, Ms Cox said: “In order to provide fiscal space in 2012-13, Government will suspend its matching contribution to the Public Service Superannuation Fund (PSSF) and pay a portion of the debt service from the Sinking Fund.
“The contribution to the Sinking Fund, $30.7 million, will be made.
“The suspension of the matching contribution to the PSSF will enable $31 million to be redirected to policy priorities in 2012-13.”