Senate Bill No. 12-80 would gradually raise government employees’ normal retirement age to 65 and set pension contributions at 6% of gross pay for employees and 7% for employers beginning January 1, 2027.
The bill passed its first reading last month and was introduced by Senate President Hokkons Baules (by request).
The measure seeks coordinated reforms to Social Security and the Civil Service Pension Fund. The provisions reviewed call for coordination, not a merger, retaining a separate pension fund and board.
The bill warns that Social Security could exhaust its fund within 10 to 15 years without reform and says the civil service pension’s existing retirement age and contribution structure are becoming unsustainable.
Under the proposal, employees born in 1967 or earlier would retain a normal retirement age of 60. The age would rise by one year for each subsequent two-year birth group, reaching 65 for those born in 1976 or later. Earlier retirement would carry reduced benefits.
The Social Security amendments in the bill show a revised benefit formula.
Alternatively, combining the systems could reduce administrative duplication and simplify transfers between public and private employment.
However, a merger would require protecting earned benefits, reconciling different rules and financing transition costs. It would not automatically eliminate funding shortfalls.