WILLEMSTAD - Finance Minister Javier Silvania has taken a firm stance, urging the General Pension Fund Curaçao (APC) to index pensions, despite legal constraints. The minister has set a 7-day deadline for the board to decide or propose an alternative course of action.
In a formal letter, Silvania emphasized the government's commitment to shielding the population, particularly the economically vulnerable, from the repercussions of persistent high inflation and diminishing purchasing power. Drawing attention to the Pisas Cabinet's commendable move to retroactively index the salaries of civil servants and educators for 2019 and 2020, allocating a substantial 46 million guilders for this purpose, the minister highlighted the need for similar measures for a considerable portion of pensioners who currently miss out on these benefits.
Acknowledging the challenging financial landscape with a funding ratio standing at a concerning 103.7%, Silvania recognizes that current legislation restricts indexing if the funding ratio falls below 105%. To address this, the minister has urged the APC management to present an alternative proposal in compliance with the law, suggesting options such as a one-time payment.
While characterizing the communication as a "friendly request," Silvania has underscored the urgency by setting an ultimatum: "I would appreciate hearing from you by November 15th regarding the feasibility of pension indexing and/or any alternative approach APC can adopt." With APC overseeing the pensions of approximately 22,400 government employees, including 10,800 retirees, the fund is grappling with financial challenges exacerbated by suboptimal investment results. The latest annual report indicates a significant drop in the funding ratio from 111.5% to 103.7% within a year. The government is eager to find a resolution that aligns with legal frameworks while ensuring financial stability for pensioners.