The Antigua and Barbuda the Social Security Board (ABSSB) has advised residents that December 31, 2024 marked its final increase in contribution rates and the conclusion of adjustments to the retirement age.
Therefore, as of January 1, 2025, the pensionable age has officially reached 65, marking the end of early retirement options introduced under the 2016 amendments to the Social Security Act.
Following gradual increases that began in 2016, contribution rates will now cap at 16 percent for private sector workers, and 15 percent for public sector employees,.
“The contribution rate was increased in 2016 by 2 percent in one go and thereafter half a percent, equally divisible, which is half and quarter and quarter to the employer-employee,” ABSSB Director David Matthias said Matthias explained.
“[December 31] is the last day anyone would ever be able to apply for an early age pension. As of next year, everyone must obtain the age 65 in order to make an application.”
The changes reflect almost a decade-long transition period designed to help people adjust to the new retirement age.
“The very reason for designing the early age, as well as graduating the age, was for persons to transition from what would have been culturally accepted, which was a 60 to 65,” Matthias noted.
He contrasted this approach with other regional systems, saying: “If you look at many of the other systems in the region that have made similar transitions, Grenada moved to 65 in one go. We gave people a very long time; 10 years is a significant period of time to adjust your mind from 60 to 65.”
According to Matthias, the system has already shown positive results. “We generated a small surplus this year as a result of these adjustments,” he revealed. However, he cautioned that this surplus might decrease as the system considers new changes.
Meanwhile, the ABSSB is exploring pension indexing to protect purchasing power.
“We are compelled as a social security system to consider whether or not the time has not come for us to index link our pensions,” Matthias said, noting that this would require careful analysis of contribution rates.
“The surplus is going to disappear as you introduce the index, as you adjust the minimum pension,” he explained. “So the emphasis then has to be on the management of our investments to bring about the returns needed to keep us in a position where we continue to make timely payments.
“But everyone is seeing the benefit of those adjustments now in what we are actually able to do in honouring our commitments to the people now,” he added.
