Got TIPS or BREAKING NEWS? Please call 1-284-442-8000 direct/can also WhatsApp same number or Email ALL news to:newsvino@outlook.com;                               ads call 1-284-440-6666

Gov't advances pension reform as current method 'unsustainable'

- Contributory Pension Scheme being implemented—Premier Wheatley
The Government of the Virgin Islands is taking decisive steps to transition from the current non-contributory Defined Benefit Pension Plan to a Contributory Pension Scheme, given the unsustainability of the present system, and the escalating financial burden on the state. Photo: jupiter.money.com
Premier and Minister of Finance Dr the Honourable Natalio D Wheatley (R7), addressing the House of Assembly on February 13, 2025, conceded the urgency of pension reform, revealing that pension expenditure has surged significantly in recent years. Photo: YouTube
Premier and Minister of Finance Dr the Honourable Natalio D Wheatley (R7), addressing the House of Assembly on February 13, 2025, conceded the urgency of pension reform, revealing that pension expenditure has surged significantly in recent years. Photo: YouTube
ROAD TOWN, Tortola, VI— The Government of the Virgin Islands is taking decisive steps to transition from the current non-contributory Defined Benefit Pension Plan to a Contributory Pension Scheme, given the unsustainability of the present system, and the escalating financial burden on the state.

Premier and Minister of Finance Dr the Honourable Natalio D Wheatley (R7), addressing the House of Assembly on February 13, 2025, conceded the urgency of pension reform, revealing that pension expenditure has surged significantly in recent years.

“The most recent actuarial study conducted in 2009 by Pricewaterhouse and Coopers (PwC) reported an unfunded liability of $201.2 million. Since then, pension expenditures have increased significantly, with the 2023 pension outlay amounting to $27 million. In 2024, pension and gratuity payments totalled $29.6 million.”

According to the Premier, the 2025 budget anticipates a further 10.3 percent increase in pension payments, bringing the total to $32.7 million, reiterating,“...this is not sustainable.”

Phased implementation

According to the Premier, the government has embarked on a structured approach to implement the new Contributory Pension Scheme, with a Pension Reform Steering Committee, co-chaired by the Deputy Governor and the Financial Secretary, established in September 2023 to guide the transition.

Premier Wheatley also detailed various measures being undertaken, including stakeholder engagement, legislative and policy reviews, actuarial assessment and technical assistance and benchmarking, among other areas of focus.

The government, he said, had already sought technical assistance from the Government of the Turks and Caicos Islands, which successfully transitioned to a Contributory Scheme in 2022 and 2023.

With this in mind, he disclosed that the administration is working diligently towards implementing these changes, with a detailed plan already advanced to the Cabinet on February 12, 2025.

“Given the complexities involved, the Government aims to finalise the framework for the Contributory Pension Scheme by the end of 2025; Subject to stakeholder consultations and legislative amendments, phased implementation is expected to commence in 2026, with full transition targeted for completion within a medium-term timeframe.”

The transition to a Contributory Scheme is expected to yield significant long-term savings by reducing the government’s pension liability, and according to Premier Wheatley, preliminary estimates suggest that annual pension expenditures could be reduced by at least 20 percent over the next decade, however, precise figures will be determined following the completion of the actuarial study.

15 Responses to “Gov't advances pension reform as current method 'unsustainable'”

  • VIslander (24/02/2025, 15:40) Like (12) Dislike (4) Reply
    This is long overdue and made worse by giving permanent and pensionable status to persons who don’t even have residency status. ????
  • hoa (24/02/2025, 15:49) Like (11) Dislike (3) Reply
    Will stay exempt no doubt.
  • lord o. (24/02/2025, 15:54) Like (16) Dislike (1) Reply
    How about NHI and Office rental space those to me are what really needed addressing and finding ways to cut those. Why is it they always look at what poor people no friends of them getting..
    • Lord o (25/02/2025, 15:19) Like (1) Dislike (1) Reply
      indeed you are so right.. they just make me disgusted to my stomach cant fix nhi cant fix kick back on these rediculous rent and projects but they must touch the lil man little pension.. sickning!! full of pure BS!!! now the little raise you get going get further deduction so you back to sqaure one. we will se a contributory pension means the pay out should be higher!!
  • Senior native citizen of the British Virgin Islands (24/02/2025, 16:01) Like (0) Dislike (0) Reply
    It sound to me that your are dangling tasty food close to our nose, but you are slow to share the food money.
    Propose mises, or promises, why one is true. Remember, Premier, cash in hand is far more beneficial than well sounding promises.

    In God we trust, all others quickly give our own money.
  • Buffalo soldier (24/02/2025, 16:26) Like (6) Dislike (5) Reply
    So basically, he just got a raise to go back making the same money again. back to the financial struggle and side jobs. not bad for a change.
  • Informed (24/02/2025, 17:36) Like (9) Dislike (0) Reply
    How many businesses are not paying the NHI and SSB and Taxes. This is a criminal offence there will be no short fall for these services if everyone pays what they are supposed to pay. During COVID we had to get certificates of good standing to renew work permits. People were being deported as business had not paid their employees deductions to NHI and SSB or tax. So the employee was deported not the employer and they were not fined in any way. Lets look at the system set up and how the failings are happening and send out debt collectors and proceed with court proceedings to reclaim the money owed. This way you can easily have a sustainable system in place. Lets not beat around the bush its millions owed.
  • Elon musk (24/02/2025, 20:28) Like (6) Dislike (3) Reply
    We needed an Elon to use his chainsaw to decrease Govt spending down here !!!!!
  • resident (24/02/2025, 21:42) Like (2) Dislike (0) Reply
    Is he talking about civil service pensions or general pensions people get in return for social security contributions for more than 10 years?
  • E. Leonard (24/02/2025, 22:35) Like (8) Dislike (0) Reply
    The following is an excerpt from an article I penned in 2015. Some of the data in the excerpt is dated. Disclaimer: I have no expertise on retirement plans; just participated in them.

    “Generally, pension funds (plans) are pre-funded by employees and employer contributing to a retirement fund during an employees working career. These contributions are, in turn, invested to generate earnings to provide employees a pension at retirement. An unfunded liability or funding gap occurs when benefit obligations for current and future retirees exceed assets. For example, if pay out obligations are $500M and there is only $300M in the fund, there is a funding gap of $200M or for every $1 pay out for future benefits there is only $0.60 available. The fund is 60% funded. Many pension experts are comfortable with an 80% funding level or a 20% unfunded liability or funding gap. What is the funding gap of the VI Civil Service pension fund?

    Research for this article revealed that VI Civil Servants do not contribute to and do not have a separate and dedicated pension fund. Government pays pension benefits (approximately $8.2M in 2014) each year out of current revenue. The pension plan is a pay as you go plan. A pre-funded plan results in the cost of benefits accrued today are being paid by current workers; whereas, the pay as you plan transfers today’s retirees cost to future generations. The current pension scheme is not just underfunded it is unfunded; it has a 100% funding gap that is approaching or may have already exceeded $300M. Is this funding gap sustainable and can it pose a problem for current and future retirees? What are some contributing causes to an unfunded liability or a funding gap?

    Funding gaps can be caused by downturns in the economy or insufficient contributions to a pension fund. Furthermore, without a dedicated pension plan, a sharp decline in government revenue will force government to prioritize spending and retiree pensions could be adversely impacted. What can be done to enhance the certainty of retiree pensions?

    Moreover, in underfunded plans, the gap can be closed or wiped out by amortizing the gap over time, i.e., 30, 20 years. An actuary calculates the annual required contribution (ARC) to built up the assets and make the plan healthy. In the VI’s case with a 100% funding gap, reducing the approximate $300M gap will be a major challenge. Nonetheless, the pension system is on life support and needs urgent attention.


    Fixing the pension system will require grandfathering current retirees and some current employees; government and current taxpayers will bear the cost for these retirees. Going forward, non-grandfathered and new employees will have to contribute to a pension plan. The pension system needs fixing before it collapses under its own weight. The following is a suggested plan of action(s) that is not in any priority order:
    • Pass pension legislation;
    • Hire consultant to fleshout plan of action;
    • Government contributes some seed money to the plan, i.e., $50-100M;
    • Engage an actuary to determine the annual required contribution for both government and employee;
    • Create a sinking fund; and
    • Establish a public education and outreach programme……….”

    • schoolmate (25/02/2025, 11:02) Like (1) Dislike (0) Reply
      E. Leonard, schoolmate you rolling on high test. You were on point a decade ago, thinking out of the box. By the way, you have not written any commentaries in a while. Just curious where did you post the article you penned? Major Bay Primary rocks.
  • Greedy Biil (25/02/2025, 05:13) Like (3) Dislike (7) Reply
    Are the ex-HOA members are still getting their millions?
  • Reality check (25/02/2025, 07:59) Like (3) Dislike (1) Reply
    Just put all government employees and elected officials on Social Security, making SS more robust and able to increase payouts. Why is there a separate system??? SS is well administered and is the easy transition for government.
    • @Reality Check (25/02/2025, 11:35) Like (0) Dislike (0) Reply
      would you want your job not to pay you your benefits after working for so long. Social Security is a mandatory contributory system and public servants pay just like you do.
  • Outsider (25/02/2025, 08:57) Like (1) Dislike (0) Reply
    The basic ideas are fairly simple. No doubt some detail is complicated.
    The current scheme operates on the same principles as a ponzi scheme.
    A ponzi scheme works fine until there is a shortage of new members joining the scheme to pay for benefits to those entitled to them.
    The Virgin Islands has almost as few 0-4 year olds today as it had in 1970. Very few children are being born. It has a dramatically larger population and even more dramatically larger and rapidly growing number of retirees. The workforce will shrink or at least not grow at the same rate as the number of retirees. It's the same the western world over as we collectively face into demographic winter; it has been generations now since VI women gave birth to enough children to sustain the population. It might not feel like that yet, but that's the position.


Create a comment


Create a comment

Disclaimer: Virgin Islands News Online (VINO) welcomes your thoughts, feedback, views, bloggs and opinions. However, by posting a blogg you are agreeing to post comments or bloggs that are relevant to the topic, and that are not defamatory, liable, obscene, racist, abusive, sexist, anti-Semitic, threatening, hateful or an invasion of privacy. Violators may be excluded permanently from making contributions. Please view our declaimer above this article. We thank you in advance for complying with VINO's policy.

Follow Us On

Disclaimer: All comments posted on Virgin Islands News Online (VINO) are the sole views and opinions of the commentators and or bloggers and do not in anyway represent the views and opinions of the Board of Directors, Management and Staff of Virgin Islands News Online and its parent company.