WILLEMSTAD - The General Old Age Pension (AOV) has not been increased for years despite Curaçao’s growing economy, sparking renewed debate in Parliament. The Social and Economic Council (SER), which advises the government on financial matters, believes the system must be reformed to ensure sustainability and fairness.

Until 2013, the AOV was adjusted annually to match inflation. However, after 2013, the law was changed so that increases would only occur when the economy grew. Because there was little or no growth for several years, the AOV amount remained stagnant. Under recent MFK-led governments, the economy has expanded, meaning the AOV should have been legally adjusted upward.

The SER agrees with a proposal submitted by the MAN-PIN parliamentary faction, which seeks to return to the pre-2013 system that linked AOV adjustments to inflation. In its advisory report, the SER recommended reinstating automatic inflation-based increases and diversifying funding sources to cover the pension deficit.

Among the suggested revenue measures are higher contribution rates for high-income earners, a modest increase in VAT, tourism levies, and additional government contributions. However, the council cautioned that a VAT increase would disproportionately affect lower-income households.

The SER also called for improved management within the Social Insurance Bank (SVB), advocating for modernized systems, stricter anti-fraud measures, and better oversight. Additionally, it proposed introducing a supplementary pension layer alongside the AOV and legalizing informal labor to expand the contributor base and strengthen the fund’s financial position.

Last year, the AOV fund faced a deficit of one million guilders, and with the island’s aging population, the number of retirees—and the pressure on the system—is expected to continue rising.