APS to pay cost of living adjustment to pensionersPOSTED: 12/21/12 2:16 PM
GREAT BAY – APS, St. Maarten’s general pension fund administrator, is striving to make cost of living adjustment payments to government pensioners and early government service retirees, before the end of this year.
As is known APS has been engaged in carrying out the decision to pay out pensions and early retirement benefits to complete the cost of living allowance (COLA) to pensioners, similar to how civil servants received COLA payments some months ago.
Indexation of pensions is regulated on the basis of article 30 of the national pension ordinance for civil servants (PLvO). The national pension ordinance indicates that indexation of pensions must follow the indexation of salaries to civil servants. The basis for this exercise would be the price index for household consumption for the year 2011, which is set at 3.2%.
The process of indexation is one in which a number of steps must be followed, including attaining prior approval of the COLA payment from the Minister of Finance and other non-government employers whose retired personnel are now collecting pension benefits. This is particularly the case for those participants who entered the pension fund before January 1, 1998, since it is the last registered employer which is responsible for paying the COLA.
APS says that indexation for 2011 will be applicable only to pensioners who retire from service with an employer who has agreed, in writing, to carry the burden of the increased costs of the retirement benefits. In other words, indexation will only be paid out to pensioners and those on early retirement, whose employers have indicated they are in agreement with the arrangement. As it now stands, the only employer to do such has been the government of St. Maarten.
APS is making payments retroactively to persons who were entitled to collect pension and or early retirement benefits as of December 31, 2011 or earlier and whose last registered employer was the government.
The payments would take place, this month, as a lump sum, with all statutory deductions being made. APS thus seeks to minimize the tax effects for pensioners, receiving this retroactive payment. Pensioners can thus rest assured that the total income and withholdings correspond to the current year 2012.
Persons with specific questions regarding their COLA payments are kindly asked to visit the APS offices, Mondays through Fridays from 8.30 a.m. through 3.30 p.m.