|INTRODUCTION OF PROTOCOL FOR A GENERAL PENSION PLAN IN ARUBA|
Oranjestad, September 19, 2011 – Last Friday, September 9, the social partners; the government of Aruba, trade unions, and employer’s organizations, among them the Aruba Chamber of Commerce signed a Protocol aimed at introducing a mandatory General Pension Plan for all workers in the private sector of Aruba. This makes Aruba only the third country in the western hemisphere, after Canada and Chile, to have a supplemental mandatory pension plan for its workers.
Residents in Aruba are already eligible for the old age pension which offers an entitlement of maximum $1000 dollar for a married couple and $558 for a single person when they reach the age of 60. Only the public sector and a limited number of private companies currently provide supplemental retirement schemes for their employees. The introduction of the general pension plan for all workers will be an add-on to the old age pension and is surely positive for the social development of Aruba, taking into account the rapidly aging population posing considerable challenges for the near future.
Legislation for the new pension plan is aimed to come into effect on January 1, 2012 and will provide for a financial contribution shared equally by the employer and the employee. The objective is to achieve a minimum of 6% contribution of the employee’s salary. This will be introduced in phases, which will start at 2% in 2012, 4% in 2013 and will reach 6% in 2014. The entitlement age is the same as the prescribed for the AOV, the general old age pension in Aruba. For compliance employers are at freedom to choose any insurance company that offers a general pension plan.
In the attachment you can read the contents of the signed protocol.