By Elvin Bailey
.jpg)
By now, the general public should be well aware of the existence of the CARICOM and the Canadian Reciprocal Agreements. These are the “I scratch your back, you scratch my back” arrangements between St. Kitts & Nevis and all CARICOM members and associate members - and Canada - that protects Caribbean nationals as they move and work within the region and Canada.
The essential features of the arrangement are that the contributions that were made in each territory can be added together to help a person qualify for a pension if that person does not qualify in any one country. The contributions can also be added together to improve the amount and value of the pension, but please note that the benefit is limited to pension (age and survivor pensions), to age grants, to elderly refunds and to funeral grants. Also, note that it is not just for people who come into St. Kitts and Nevis to work, but it is also for citizens of St. Kitts and Nevis who go to other participating countries to work.
These agreements are possible because each territory defines a contribution as one week or part thereof that an insured person works. However, there are different pensionable ages for different countries. Our pension age is 62 years, but is subject to possible change as the Fund undergoes Reform. Six of the regional countries have a pension age of 60 years, seven chose 65 years for pension, and one country goes as high as 70 years. Some countries allow early retirement, others, like ourselves do not; at least, not yet.
Contribution rates per country also differ, but they do not really matter in terms of the pension calculation itself. The number of contributions required to qualify for pensions also differ; here, one needs 500 contributions to qualify for a 30% age pension. Two countries require 750 contributions to attain pensionable rights, and one country asks for 150 only. However, and this is important, where the 150 points are required, the minimum pension is only 15% of appropriate wages and for the 750 contributions, the minimum pension stands at 40% of the appropriate wages.
The appropriate wage for our pension purposes – at least for now - is the best three year average of the last 15 years. Not all pension funds are so generous. Some use the best 5 year average of last 20 years. Some countries use career average. This aspect is important because wages tend to be best later in one’s career, but is lowest at entry into the labour market.
With all these differences, has this system worked? Yes it has. Since the CARICOM agreement became law in 1999, we have paid 28 who have resided or retired in Antigua, Barbados, Guyana, St. Lucia, Montserrat, Grenada, Trinidad & Tobago and St. Maarten, as well as a few who have remained in the Federation. Our largest payment to date has been a pension payment of EC$1,820 per month and the smallest has been EC$20.53. Before you comment on the $20.53, recall that the amount is based on the salary that was reported for the insured person during his working life and the $20.53 is our portion of the total pension that the person is receiving. Note though, that work continues to review and refine the Agreement with a view to improving how it works.
Additionally, the Canadian Reciprocal Agreement, signed by the respective Governments in 1992 has already benefitted seven persons within our borders.
Initially, age grants were payable and some persons received some handsome payouts. That was amended to allow conversion to monthly pensions. Work continues to review and refine that agreement also with a view to improving how it works.
Finally, I wish to remind readers that in St. Kitts & Nevis, a person can qualify for a pension that ranges between 30% and 60% of wages up to the ceiling of EC$6,500.00 per month. That is, from $30.00 to $60.00 of each $100.00 up to the ceiling wage.
