Pensions Act 2025

Part 1: Overview and Short Title

This legislative document outlines the "Pensions (Amendment) Act, 2025" for Saint Christopher and Nevis. The Act aims to amend the existing Pensions Act (Cap. 22.06) to introduce significant changes to the pension system for public officers. The amendment focuses on establishing a contributory pension plan, restructuring existing parts of the Act, and providing transitional provisions for a smooth implementation. The Act has been passed by the National Assembly and awaits Royal Assent.

Part 2: Interpretations and Definitions

Key terms within the Act are defined to ensure clarity and consistent application. The term "Minister" is specifically defined as the Minister of Finance, emphasizing the Ministry’s responsibility in overseeing the pension system. Other crucial terms like "contributor," "contributory service," "pensionable service," "pensioner," and "Pensions Fund" are defined within Part III of the amended Act, relating to the new Contributory Pension Plan, providing a clear framework for understanding the scope and application of the new pension scheme.

Part 3: Contributory Pension Plan (Part III)

The core of the amendment lies in the introduction of a new Contributory Pension Plan (Part III). This plan mandates contributions from eligible public officers towards the Pensions Fund. Eligibility is detailed, encompassing officers joining the public service on or after May 18, 2012, Government Auxiliary Employees (formerly non-established workers), and officers who joined before May 18, 2012, and choose to retire at 62. The Plan stipulates a compulsory retirement age of 62 and outlines conditions for pension entitlement, including a minimum of 15 years of continuous service and contributions to the Fund. The Act also specifies provisions for gratuity payments, refunds of contributions under certain circumstances, and procedures for handling pensions in cases of death or re-employment. The maximum pension payable is capped at two-fifths of the highest pensionable emoluments, with further restrictions for officers receiving pensions from other public service.

Part 4: Application to Government Agencies (Part IV)

The amended Act extends the application of the pension provisions to government agencies, defined as Statutory Bodies under the Finance Administration Act. Public officers seconded to these agencies retain their pension rights and benefits as if they remained within the public service, ensuring continuity of pensionable service regardless of secondment. The terms of secondment must be no less favorable than the original terms of service, safeguarding the rights and benefits of seconded officers.

Part 5: Miscellaneous Provisions (Part V) and Schedules

Part V addresses miscellaneous aspects, empowering the Minister to make regulations for the Act’s implementation. Crucially, it incorporates transitional provisions to protect existing pension rights, benefits, and payments made under the previous Part II of the Act. These provisions ensure that the transition to the new Contributory Pension Plan does not negatively impact existing pensioners and those with pensionable service accrued prior to the amendment. The Second Schedule details the investment guidelines for the Pensions Fund, prioritizing low-risk investments in domestic financial entities. The Third Schedule sets out the rates of pension calculation, incorporating considerations for qualifying service, continuity of service, emoluments, and special provisions for officers injured in the line of duty. The Fourth Schedule provides the form for officers who joined before May 18th, 2012 to elect to join the new pension scheme.

Part 6: Detailed Breakdown of Key Provisions

The Act outlines specific scenarios and their corresponding pension implications:

• Termination in Public Interest: Allows for a refund of contributions with interest if service is terminated in the public interest and the contributor is not eligible for a pension.
• Infirmity Retirement: Provides for pension payments for contributors with at least ten years of continuous contributions who retire due to permanent infirmity, even if they haven’t reached the standard retirement age.
• Refunds: Addresses scenarios where a contributor leaves public service without qualifying for gratuity or pension, ensuring a refund of their contributions with interest.
• Re-employment: Offers options for contributors re-entering public service after a break, including repaying withdrawn contributions to maintain continuous pensionable service or starting fresh contributions.
• Protection against Assignment and Bankruptcy: Safeguards pensions from assignment or seizure in bankruptcy proceedings.
• Gratuity in Case of Death: Provides for gratuity payments to the estate or legal representative of a deceased officer.
• Pensions for Dependents: Addresses pensions for dependents in cases of death due to work-related injuries or diseases.
• Pensions Fund Management: Establishes the Pensions Fund, its funding sources, investment guidelines, and administrative oversight by the Accountant General. Regular actuarial reviews are mandated to assess the Fund’s long-term viability.
• Contributions: Specifies a 3% deduction from salary as contribution to the Pensions Fund.
• Leave of Absence: Details how contributions are handled during different types of leave, including leave without pay, study leave, and other paid leave.
• Pension Calculation: Sets out formulas for calculating pension and gratuity amounts based on pensionable service and emoluments. It also gives the key to the formula including how each component is to be applied.
• Transitional Provisions: Protects the rights of existing pensioners and those with pensionable service accrued before the amendment’s commencement.

This detailed structure allows for comprehensive coverage of various scenarios within the public service pension system, ensuring clarity and providing a robust framework for the management and disbursement of pensions. The inclusion of schedules containing rates and forms further enhances the Act’s practicality and ease of application.