APS and finance minister sign pension reform financing agreement

APS Chairman of the board, Franklyn Richards and Minister of Finance, Richard Gibson Sr. shake  hands following the signing of the pension reform financing agreement, last Friday. APS Chairman of the board, Franklyn Richards and Minister of Finance, Richard Gibson Sr. shake hands following the signing of the pension reform financing agreement, last Friday.

PHILIPSBURG, St. Maarten – Actual pension reforms in St. Maarten are one step closer to being implemented, following the signing of an agreement between the general pension fund administrator, APS and St. Maarten’s Finance Minister, Richard Gibson Sr.

The agreement was signed on Friday last, at the Sonesta Maho Beach Resort, as a major highlight of the APS 2017 pension seminar, held at the same venue.

Signing on behalf of APS were APS board officials, Mr. Franklyn Richards and Mr. Guilliano Saturnilia. “The agreement as reached between St. Maarten’s general pension fund, APS and the country’s minister of finance is part of the process on pension reform which has been ongoing” says APS board chairman Franklyn Richards. He added that the agreement specifically takes into consideration the need for structural changes to the pension plan, which would make it more sustainable.

This latest agreement contributes significantly to the overall sustainability of the pension fund - one of the drivers of the pension reform initiative, according to Richards.

The signing of the agreement comes after several aspects related to the pension reform project have been mutually agreed upon.

“Since participants of the APS fund are entitled to a lifelong pension, as stipulated by law, APS is required to have a minimum amount of funds always available. This pension provision makes sure that APS would be able to meet its financial obligations to all its participants, when that time arises”, notes the APS chairman of the board.

The agreement takes into consideration aspects such as longer life expectancy and the actuarial return. These may have a substantial negative impact on the financial position of the pension fund thereby limiting the fund’s ability to meet its legal pension obligations.

The signed agreement entails that the government of St. Maarten will inject capital into the pension fund if the financial position of the fund is threatened, because of the aforementioned factors.

Discussions preceding the agreement carefully looked at the life expectancy of participants.


Cognizant that it is impossible to predict how long a participant will live, the pension fund uses actuarial tables and historical data of its own participants, along with local and regional statistics to calculate how many years the pension fund can be expected to pay out a pension to each of its participants.

These include payment of senior’s pensions and benefits to their surviving family members in the form of widow(er)’s and orphan’s pension, in the event of their passing. Currently, this period of paying out pensions is about 30 years in duration.

With persons enjoying a longer life span, however, a larger provision would be needed to cover a longer payout period, in the future. Another important aspect, which APS discussed with government is the long-term interest yields that the fund can expect to earn on relatively risk-free investments, such as U.S. treasury bonds.

This is used to calculate the provision that would be required. The actuarial return is now set at 4 percent, similar to the past years.

With interest rates remaining low for many years, expectation is that the actuarial return rate may have to be lowered in the coming years.

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0 #1 Arlene 2017-05-23 05:04
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:The signing of the agreement comes after several aspects related to the pension reform project have been mutually agreed upon. "Unquote"
I know for a fact the active persons and non active persons did not have an input in the Ohbeah man Gibson wishes. He bread buttered and the pensioners will suffer in the long run. Obeah man Gibson even have Franky under is spell
Was a meeting called with the active pensioners and to be pensioners about this upcoming change? No No, But before their meeting started this was signed off plus the Minister was about a half hour late for the meeting and it could not start without him. Well, well, look what an Ohbeah man can do. Remember he has millions of dollars and he deciding for you who does not even have a 1000 guilders. :sad: :sad: :sad: He got us the people again
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