WILLEMSTAD – The Government of Curaçao is studying the possibility of indexing the so-called duurtetoeslag (cost-of-living allowance) for a specific group of pensioners from the Algemeen Pensioenfonds van Curaçao (APC). This concerns individuals who retired before January 1, 2016, receive the duurtetoeslag, and mostly worked for government or semi-government entities.
The matter has been discussed over the past two years in meetings between government representatives, pensioner organizations, and other stakeholders. Pensioners in this group did not receive any pension indexation between 2010 and 2013. With inflation and an aging population, the absence of indexation has had an increasing impact on their purchasing power.
The government acknowledges that this is not just a financial issue but also a social challenge that directly affects the well-being of these retirees. While employers are not legally obliged to apply retroactive indexation and court rulings have confirmed this, the government says it is important to continue dialogue to explore possible solutions.
Background of the Cost-of-Living Allowance
The duurtetoeslag was first introduced in 1939 as an additional payment to offset rising living costs, later extended to pensioners in 1942 and formally regulated in 1943. For decades, it was financed from the government’s general funds and served as both inflation compensation and a structural pension supplement.
In 1995, the financial responsibility for the duurtetoeslag was expanded to include state-owned companies, foundations, and other government institutions for their former employees.
The arrangement was formally revoked on January 1, 2016, with accrued rights preserved. From that date onward, pension indexation became conditional on two factors: salary indexation for civil servants and the financial position of the pension fund. The pension component is funded by the pension fund, while the duurtetoeslag component is paid by the last employer.
In practice, the lack of indexation has left pensioners with the duurtetoeslag facing a steady decline in purchasing power. APC and employers remain bound by existing laws and regulations and cannot cover these costs without prior authorization.
Balancing Interests and Feasibility
The government says it must weigh the interests of pensioners against financial feasibility. Curaçao’s population is aging rapidly, and maintaining the purchasing power of this growing group is a priority. However, resources are limited, and any measures must comply with legal and budgetary constraints.
The government will continue discussions with pensioner representatives and other stakeholders. While it is still too early to speak of concrete solutions, the consultation process is underway—a positive sign, according to officials. The government has emphasized its commitment to pursuing the process transparently and constructively.
