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Dudus Extradition and Pension reform opinions, what’s the parallel?
Now before you all jump off the deep end, I am not suggesting anything as it relates to whether or not Dudus was not an evil man and should not have been extradited, so let me first make that clear.
What I intend to focus on in this piece is what’s common about the events surrounding these two events and so I will go back briefly and look at the Dudus Extradition affair.
The USA requested the extradition of Dudus, the government’s legal advisor, the Attorney General’s Office was requested to give an “opinion” ( note this word as it will appear quite a bit in this article) and it advised the government that proceeding with the request as laid out by the USA government would breach Dudus Constitutional rights.
The Attorney General at the time, Dorothy Lightbourne was dragged over the coals for her decision and the government was accused of protecting a criminal from having is day in a USA court. The opposition PNP jumped at this one and milked it (rightly so) for all it was worth. It was even suggested that the AG should have the court rule on the matter, but the AG steadfastly refused to do so, the rest is history as we all saw how that played out.
In 2010, while the government of the day (JLP) was in negotiations with the IMF , the pension reform process was one of the stumbling block standing in the way of the negotiations. The AG’s office was asked to provide an “opinion” on the issue and two years later (under a new government) the furnished that opinion, which was made public.
The opinion for the AG’s office suggested that any changes to the existing pension act would be illegal and unconstitutional and would breach the collective agreement between the government and its workers, can you see the parallels.
(Key words - unconstitutional, illegal ,breach and the human element aka the workers).
Now this “opinion” from the AG’s office has created some unease between the goverment and our masters at the IMF and has threatened to derail the new standby agreement being worked on between the government of Jamaica and the funds, which is something the government simply cannot afford to occur.
What happened next was the opposition sensing blood in the waters asked the now AG to have the “courts” ( note this word) rule on the matter, but the AG would have none of it, instead he has the final authority and he would be withdrawing the original “opinion” and replacing it with one of his own over his own signature.
Now as I mentioned before , the role of the AG is to provide legal advise to his client, which happens to be the government of Jamaica and in this case the PNP.
The AG is an attorney and the job of any attorney is to provide by whatever means necessary, legal but not necessarily morally correct advise , which is in the best interest of his client against its accuser in any legal showdown. Show here we have the GOJ vs Public Sector workers, rather interesting isn’t it?
So what’s the parallels ?
The AG’s office in both cases provided “opinions”, which we found to be not pleasing to one party or another. Both opposition parties (one in either case) requested the matter be placed into the hands of the courts and both AG’s refused and were willing to go it alone. What I see therefore is a tendency for the AG not to advise the government but instead to carry out the advise of the government and then provided an opinion in keeping with the government wishes.
Now what is interesting is the JLP thought it would have won the last election and if they had done so, they would today have to deal with the original legal opinion as provided by the AG’s office. Its the PNP who is in power today , if that were not the case, what would have been the PNP’s position on the original “opinion” and would they have supported its withdrawal and subsequent replacement without going to court.
I guess we will never know, but what’s your “opinion” ?
Now what about the subtantive issue on hand ie the pension reforms?
I am not sure how many Jamaicans are aware of what is going on here so I will just briefly touch on what I am aware of. Pension is like a ponzi scheme (yes it is) think about it. Today you pay into a scheme, from which you get no benefits today, but should benefit from in the future. The people who receives a pension today are not paid from their funds, instead they are paid by the funds that you the working persons put into the fund today.
The problems is the pension fund like any ponzi scheme, runs into trouble, when there are more withdrawals than deposits and will ultimately fail in spectacular fashion like Olint, CashPlus, Standford or Madoff to name a few. Today the funds available in the pension funds are dwindling, due to the fact that there are more persons receiving benefits vs the amount of funds that is going into the fund, due mainly to higher levels of unemployment.
The deal between the government and its workers, it that government and workers agree on lower level of wages, but the government offers additional benefits (sweeteners) like department leave, special leave and the big one, they pay into the pension fund on the behalf of its workers. The problem the government faces today is, its flat broke and as such can no longer afford to pay billions of dollars into the pension fund on the behalf of its workers.
At the same time the government does not have the capacity to pay workers anymore. Now that workers are being asked to contribute to their own pension, they would see a reduction in their take home salaries. This is the dilemma that faces us today and the IMF is insisting that it must be addressed before Jamaica gets another red cent.
Jamaica could opt to do like what many countries have done, but I am not sure if the IMF will accept these, which really only delay the inevitable.
1-Increase NIS contribution rate ie taking more from all of us.( I think its currently at 2.5% worker match by 2.5% employee, when it was moved up in 2010)
2-Increase the retirement age (its different for men and women but in 2010 legislation was passed to move women from 60 in 2011 to 65 in 2015 by adding one year to every year between 2011 to 2015. ) This could be moved to say 67 yrs.
3-Reduce payout to pensioners (this would be a straight fight given the tough economic climate today)
4-Actively invest and properly manage the fund to produce a yield equal to or greater than the rate of inflation.
5-Get more of the huge pool of self-employed persons into the net and ensure they too pay into the fund.
The fact is, the IMF is not willing to wait around for any long time and wants short term action now by the government to show they are serious about these reforms, which if not implement, will plunge the country into bankruptcy.
I would like to hear the views of someone with more knowledge than I have on this rather important subject, to not only critique what I have written here but to provide some additional insight into this issue, which I don’t believe is given the attention it really needs.
Now before you all jump off the deep end, I am not suggesting anything as it relates to whether or not Dudus was not an evil man and should not have been extradited, so let me first make that clear.
What I intend to focus on in this piece is what’s common about the events surrounding these two events and so I will go back briefly and look at the Dudus Extradition affair.
The USA requested the extradition of Dudus, the government’s legal advisor, the Attorney General’s Office was requested to give an “opinion” ( note this word as it will appear quite a bit in this article) and it advised the government that proceeding with the request as laid out by the USA government would breach Dudus Constitutional rights.
The Attorney General at the time, Dorothy Lightbourne was dragged over the coals for her decision and the government was accused of protecting a criminal from having is day in a USA court. The opposition PNP jumped at this one and milked it (rightly so) for all it was worth. It was even suggested that the AG should have the court rule on the matter, but the AG steadfastly refused to do so, the rest is history as we all saw how that played out.
In 2010, while the government of the day (JLP) was in negotiations with the IMF , the pension reform process was one of the stumbling block standing in the way of the negotiations. The AG’s office was asked to provide an “opinion” on the issue and two years later (under a new government) the furnished that opinion, which was made public.
The opinion for the AG’s office suggested that any changes to the existing pension act would be illegal and unconstitutional and would breach the collective agreement between the government and its workers, can you see the parallels.
(Key words - unconstitutional, illegal ,breach and the human element aka the workers).
Now this “opinion” from the AG’s office has created some unease between the goverment and our masters at the IMF and has threatened to derail the new standby agreement being worked on between the government of Jamaica and the funds, which is something the government simply cannot afford to occur.
What happened next was the opposition sensing blood in the waters asked the now AG to have the “courts” ( note this word) rule on the matter, but the AG would have none of it, instead he has the final authority and he would be withdrawing the original “opinion” and replacing it with one of his own over his own signature.
Now as I mentioned before , the role of the AG is to provide legal advise to his client, which happens to be the government of Jamaica and in this case the PNP.
The AG is an attorney and the job of any attorney is to provide by whatever means necessary, legal but not necessarily morally correct advise , which is in the best interest of his client against its accuser in any legal showdown. Show here we have the GOJ vs Public Sector workers, rather interesting isn’t it?
So what’s the parallels ?
The AG’s office in both cases provided “opinions”, which we found to be not pleasing to one party or another. Both opposition parties (one in either case) requested the matter be placed into the hands of the courts and both AG’s refused and were willing to go it alone. What I see therefore is a tendency for the AG not to advise the government but instead to carry out the advise of the government and then provided an opinion in keeping with the government wishes.
Now what is interesting is the JLP thought it would have won the last election and if they had done so, they would today have to deal with the original legal opinion as provided by the AG’s office. Its the PNP who is in power today , if that were not the case, what would have been the PNP’s position on the original “opinion” and would they have supported its withdrawal and subsequent replacement without going to court.
I guess we will never know, but what’s your “opinion” ?
Now what about the subtantive issue on hand ie the pension reforms?
I am not sure how many Jamaicans are aware of what is going on here so I will just briefly touch on what I am aware of. Pension is like a ponzi scheme (yes it is) think about it. Today you pay into a scheme, from which you get no benefits today, but should benefit from in the future. The people who receives a pension today are not paid from their funds, instead they are paid by the funds that you the working persons put into the fund today.
The problems is the pension fund like any ponzi scheme, runs into trouble, when there are more withdrawals than deposits and will ultimately fail in spectacular fashion like Olint, CashPlus, Standford or Madoff to name a few. Today the funds available in the pension funds are dwindling, due to the fact that there are more persons receiving benefits vs the amount of funds that is going into the fund, due mainly to higher levels of unemployment.
The deal between the government and its workers, it that government and workers agree on lower level of wages, but the government offers additional benefits (sweeteners) like department leave, special leave and the big one, they pay into the pension fund on the behalf of its workers. The problem the government faces today is, its flat broke and as such can no longer afford to pay billions of dollars into the pension fund on the behalf of its workers.
At the same time the government does not have the capacity to pay workers anymore. Now that workers are being asked to contribute to their own pension, they would see a reduction in their take home salaries. This is the dilemma that faces us today and the IMF is insisting that it must be addressed before Jamaica gets another red cent.
Jamaica could opt to do like what many countries have done, but I am not sure if the IMF will accept these, which really only delay the inevitable.
1-Increase NIS contribution rate ie taking more from all of us.( I think its currently at 2.5% worker match by 2.5% employee, when it was moved up in 2010)
2-Increase the retirement age (its different for men and women but in 2010 legislation was passed to move women from 60 in 2011 to 65 in 2015 by adding one year to every year between 2011 to 2015. ) This could be moved to say 67 yrs.
3-Reduce payout to pensioners (this would be a straight fight given the tough economic climate today)
4-Actively invest and properly manage the fund to produce a yield equal to or greater than the rate of inflation.
5-Get more of the huge pool of self-employed persons into the net and ensure they too pay into the fund.
The fact is, the IMF is not willing to wait around for any long time and wants short term action now by the government to show they are serious about these reforms, which if not implement, will plunge the country into bankruptcy.
I would like to hear the views of someone with more knowledge than I have on this rather important subject, to not only critique what I have written here but to provide some additional insight into this issue, which I don’t believe is given the attention it really needs.