Bill No. 8-170 seeks to amend Palau’s Civil service Pension Plan.
Senator Raynold Oilouch introduced the measure in the Upper House based on the recommendation of the Board of Trustees of the Palau Civil Service Plan (PCSP).
The Board of Trustees of PCSP has recommended to the Olbiil Era Kelulau that the “Mandatory Service Retirement” be scrapped.
In its recommendation, the PCSP Board said the “Mandatory Service Retirement” clearly places a burden on the Civil Service Plan that is simply unsustainable.
Because of the “Mandatory Service Retirement”, the PCSP noted that the Civil Service Pension Plan is woefully underfunded by tens of thousands of dollars and expected to remain so for the foreseeable future given the current fiscal situation of the National Government.
To underscore its point, the PCSP Board cited figures from last year.
As of October 1, 2009, there were 77 active participants that had already reached the 30-year service mark and had also reached the age of 60. Only 9 active participants had reached the 30-year service mark and had also reached the age of 60.
“These numbers indicate the unsustainability of maintaining the 30 year service mandatory retirement provision. The Republic cannot simply afford to be paying out retirement services for so many individuals who are no longer working and who are likely to live for quite some time,” part of the bill reads.
In the present set-up, mandatory retirement is imposed on civil service employees who reach the age of 60 or have been in service for 30 years.
Under the proposed bill, mandatory retirement shall be imposed only upon civil service workers who reach the age of 60.
