Creation of a Reformed Pension System for Civil Servants in Timor-Leste
In February 2011, the government of Timor-Leste (GoTL) enacted a law creating a pension system for civil servants. However, the government now wants to repeal and replace this pension law as it deems it too broad in scope, coverage and cost, and it...
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| Language: | English en_US |
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Washington, DC
2015
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| Online Access: | http://documents.worldbank.org/curated/en/2014/02/20425276/creation-reformed-pension-system-civil-servants-timor-leste http://hdl.handle.net/10986/21120 |
| Summary: | In February 2011, the government of
Timor-Leste (GoTL) enacted a law creating a pension system
for civil servants. However, the government now wants to
repeal and replace this pension law as it deems it too broad
in scope, coverage and cost, and it contains several
non-standard design features. In its place, the GoTL wants
to consider creating a reformed permanent civil service
pension program covering all civil servants. Within a few
years thereafter, the government also wants to implement a
national social security system. This system will cover
formal sector workers, and it is likely civil servants will
also participate. Consequently, civil servants may get
benefits from both the national social security system and
the civil service pension system. Timor-Leste has many civil
servants with long service both before and after
independence. The reformed pension system for civil servants
will give the government a method of honorably allowing its
elderly civil servants to exit the work force. At this time,
the primary method of caring for elderly civil servants is
to continue salary payments. This is because there is no
mandatory retirement age for civil servants and the
government does not yet have effective procedures for
compelling older workers to retire when their productivity
level declines. Consequently, the government has informed us
that the civil service pension is unlikely to pay benefits
to any civil servants until such time as these two issues
are resolved. The government estimates this will take five
years (until 2018). Until that time, elderly civil servants
will continue to receive their salary and will not receive a
pension from the reformed civil service pension program. |
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