WILLEMSTAD – The Centrale Bank van Curaçao en Sint Maarten (CBCS) has published a sobering review of the pension systems in Curaçao and Sint Maarten, concluding that both countries face serious structural challenges that threaten long-term sustainability.
The review, conducted independently by Mercer Consulting at the request of CBCS, gave the two systems an overall score of 5.8 out of 10 (Grade C). While the state pension schemes were found to be relatively strong, with Curaçao’s benefit covering 41% of the average wage and Sint Maarten’s covering 60%, the report highlights major weaknesses in private pension coverage, contribution levels, and governance.
Strengths and Weaknesses
According to the review, the strongest aspects include a solid basic state pension and strict preservation requirements. However, the lack of mandatory private-sector pensions, limited contribution requirements, and inconsistent governance practices are seen as serious risks. Currently, only 32% of the working-age population participates in private retirement savings plans, and contribution levels remain insufficient.
Three Key Recommendations
Mercer made three main recommendations to improve the system:
Introduce a compulsory second pillar to expand private pension coverage, increase mandatory contributions, and improve replacement rates.
Strengthen fiduciary responsibilities by requiring trustees to adopt clear governance policies on risk management, conflicts of interest, and anti-corruption.
Enhance transparency and member protection by mandating clearer disclosure of costs, investment strategies, and individual pension projections.
The CBCS announced it will integrate recommendations two and three into its 2026–2028 Strategic Plan, focusing on governance and transparency reforms within the pension sector. The possibility of a compulsory second pillar will be left to the governments of Curaçao and Sint Maarten to evaluate.
Risks of Inaction
The report warns that without reforms, the current systems will struggle to remain viable as populations age. Pension funds will increasingly rely on investment returns and reserves rather than contributions. Mercer also cautioned that systemic weaknesses could undermine public trust in the pension system, particularly if communication with members remains inadequate.
CBCS’s Action Plan
As part of its new strategy, the CBCS will implement stricter requirements for pension fund trustees, mandate disclosure of investment performance, and require members to receive annual statements of accrued benefits and costs.
The Central Bank said its goal is to ensure that Curaçao and Sint Maarten’s pension systems align with international standards and provide long-term security for current and future retirees.
