Seniors get three per cent rise in pension

FRIDAY, JULY 1: Seniors will get a three per cent pension increase from August.

But employees will not have to contribute more until a year later — from August 2012.

Premier Paula Cox said: “The 2011 increase in benefits would normally be accompanied by a corresponding increase in contributions, by an actuarially recommended rate of a combined $3.34 (5.5 per cent) per week for employees and employers.

“However, due to the continuing economic climate it would be counter-productive to increase the contributions at this time. Therefore the proposed 5.5 per cent increase in contributions will not come into force until August 2012.”

Finance Minister Ms Cox noted that as of March 31, the Contributory Pension Fund had total assets of more than $1.43 billion — 12 times the annual value of benefits to be paid in the 2011/2012 fiscal year.

She said that considering the relatively strong position of the Fund, it is anticipated it can withstand the one-year delay in contribution increases.

The long-term challenges of the Fund, due to an aging population, means it is essential that Government closely monitor the Fund’s performance.

Ms Cox said social and fiscal responsibility must be struck to maintain the long-term viability of the Fund.

“For our seniors, the over 43 per cent increase in pension benefits put through by this administration since its time in Government is above the underlying trend rate of inflation.

“Therefore seniors’ pensions will be in good shape for many years to come and will be able to be shielded from the effects of inflation by periodic adjustments in line with the movement in the Consumer Price Index.”