Palau House Eliminates Mandatory Civil Servant Retirement

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Bill meant to help save overburdened pension plan

By Aurea Gerundio-Dizon

KOROR, Palau (Island Times, May 17, 2012) – The House bill that eliminates the civil service mandatory retirement after 30 years of total service passed third and final reading yesterday in the House of Delegates.

The bill states that since the inception of mandatory service retirement of 30 years, the cost of paying benefits far outweighs the contributions.

This financial scheme has reportedly increased also the unfunded liability of the Civil Service Pension Plan.

A person with 30 years of experience reportedly has much to contribute and retaining their employment until the age 60 will prolong their contribution to the plan and thereby allow solvency and continuity of the Civil Service Pension Plan.

To those who have 30 years or more of service, who have not attained the mandatory retirement age of 60 but wish to retire, the bill states that they shall be eligible to retire.

The current law on mandatory retirement states that an employee shall retire at age 60, except for those in employment positions exempted by the board or those individuals who receive specific exemptions from the board.

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