The retirement age has been increased from 55 to 60 years.
Prime Minister Bob Loughman made the parliamentary amendment when he presented the Bill for the Statute Law (Miscellaneous Provisions) Act No. of 2020 in Parliament yesterday afternoon.
“Parliament will increase the retirement age from 55 to 60 years,” he said. “This is in accordance with improved health facilities and awareness by health officials. Our life expectancy has improved and it is proper for us to increase the retirement age to 60 years.
“It does not mean that when you are 60 you are old and cannot enjoy your retirement benefits from VNPF. …VNPF has agreed and the Minister of Finance will correct me, that you can access your retirement package at 57 (sic) years.”
Minister of Finance and Economic Management, Johnny Koanapo, added, “I confirm discussions with VNPF are underway so there will be amendments to relevant legislations before the end of the year.”
The amendment yesterday was made to the relevant sections of the Employment Act [CAP 160].
Meanwhile according to World Health Organisation data published in 2018, life expectancy in Vanuatu is: Male 70.1, female 74.1 and total life expectancy is 72.0.
Just last month during the Finance Minister’s first visit to the Fund, he “flagged the idea of reducing the retirement age from 55 years to 47 years, and to allow for partial withdrawals...”.
At the time, the minister stressed that rather than waiting until they are old to claim their benefits, members should enjoy the fruits of their labour when they are still active, saying, “the reason behind this concept is ensure that members can benefit from their savings when they are still productive".
Minister Koanapo’s suggestion was welcomed by the Fund but it will require legislative changes to the VNPF Act [CAP 189].
Another parliamentary amendment made yesterday was for contracts of employees to be permanent after a 3-months’ probation period.
With the suspension of the 22 Opposition MPs, the absence of debate was obvious and all the amendments to the Acts in the Bill for the Statute Law (Miscellaneous Provisions) were carried unanimously.