Saint Lucia is on track for a shrinking labour force and mounting pension costs as the country’s birth rate continues to fall, raising concerns over the long-term sustainability of the National Insurance Corporation (NIC) fund.
The island’s fertility rate, the average number of children per woman, has fallen from 3.0 in 1990 to just 1.3 in 2020, well below the 2.1 needed to maintain population levels. NIC statistician Paul Kalicharan says this slow demographic shift could strain the system within the next decade.
“If you have anything below 2.1, over time, you will have a contraction in population. This is what we are having now,” he said.
Globally, the fertility rate has halved over the past 60 years, from 4.85 births per woman in 1950 to 2.25 in 2024, according to UN data.
Kalicharan warns that the effects of the trend will be felt sharply in small island economies with limited labour reserves.
Pensions could double by 2030
Saint Lucia currently pays about 11 000 pensions, supported by more than 100 000 active workers. But with fewer young people entering the labour market, he projects that pension payments could more than double within the next five to ten years.
“As more people move into retirement, expenditure increases. At some point, the contributions from employers and employees, plus investment income, might not be enough to meet benefit payments,” he said.
The NIC operates on a pay-as-you-go model, meaning today’s workers fund today’s retirees. In the early years of the scheme, there were 14 contributors for every pensioner; now the ratio is between six and seven to one. Without policy changes, Kalicharan says the ratio could approach one-to-one.
Policy options on the table
Measures under consideration include increasing the retirement age – currently 65, with early retirement allowed from 60 – and raising contribution rates. Barbados has already moved to a retirement age of 67 to keep more people in the workforce.
The NIC is also exploring family-focused incentives such as higher maternity grants, longer maternity leave, introduction of paternity leave, and other benefits for childbearing parents. Immigration policy reforms, including importing labour to meet workforce needs, are also being discussed.
“The time is coming when you may have to import labour, not because of skills, but because you cannot get the numbers,” Kalicharan said.
Economic and social pressures on families
Public policy and development specialist Bynta Ernest says the low birth rate cannot be tackled without addressing the economic realities facing women, who make up 60 per cent of NIC contributors in the formal job market.
“Babies are not cheap. It costs a lot emotionally, physically and financially to be a parent. Women dominate the service sector, which is the lower-paying part of the economy,” said Ernest, the CEO of Rights Based Solutions.
She points to delayed childbearing as women pursue higher education, often into their 30s, when fertility naturally declines. Structural barriers, including the expectation that women carry the main caregiving burden, also push some to opt out of having children altogether.
She argues for workplace reforms such as extended parental leave, subsidised childcare, flexible work arrangements, and inclusive policies for single parents, same-sex couples and adoptive families.
Health factors and social stigma
Ernest also calls for greater attention to reproductive health issues, such as uterine fibroids and endometriosis, which affect fertility but remain underfunded and stigmatised. Male infertility, she adds, is rarely addressed due to cultural taboos, despite research linking it to recurrent pregnancy loss.
Not an immediate crisis
Kalicharan stresses that the NIC fund remains viable until at least 2050, but long-term planning is essential.
Regarding the birth rate, he said, “We don’t project that it will continue to decline forever. There will be an equilibrium. But we take measures 20 or 25 years in advance so that we avoid a situation where contributions can’t cover pensions.”
For now, the NIC’s reserves are growing. But without decisive action, the balance between the country’s retirees and its workers could tip, with lasting consequences for Saint Lucia’s economy.
In anticipation, the NIC has already completed its actuarial review, a process normally conducted every three years, and recently submitted a policy paper on raising contribution rates to Parliament. However, Kalicharan said that the exact increase can only be made public once Cabinet has given its approval – a step toward sustaining the system for future generations.
Same sex couples cant make children and would contribute to the decline. Traditional families need to be encouraged
The government must first have all employers to comply with the 65 years before raising it. There are a lot of employers presently not adhering to the 65 years retirement age. Ppl want to continue working but employers fast to retire you to pay less wages.
SLT I know u scrutinize every comment and perhaps is politically motivated but what else to ppl expect when they allow gays and lesbians running rampant all over our little island….you don’t have to post this but atleast the truth is rubbed into your faces….run from it all yall want.
If these old people think they will get us to work until 67 only to receive little to nothing from NIC in exchange they must be smoking crack. NIC plays hardball to give people maternity leave y’all think we stupid enough to believe we going to get it any better she we old and cannot do much for ourself? Lol good luck finding suckers to pay for y’all retirement.
Most of us still have almost 40 years to go before we can legally retire and we already at midlife. That’s a horrible deal for those mideocre benefits that you have to fight with the staff at NIC for.
I’d contribute to the program if they offered FULL healthcare coverage no matter what the need is or how expensive it is. then and ONLY then will I even consider resuming NIC contributions. I paid NIC for years and not once received assistance when I needed it. I had my daughter during the pandemic and they denied us our maternity payment by refusing to process it no matter how many times we called or came in. When I fa sick I had to pay for everything out of pocket and never got reimbursed by NIC. What’s the point? It makes more sense to get a life assurance and insurance policy or just one of the cuz at least you will get some kind of help when you need it. And retirement is fairy tale in this day and age. Most people are forced to work until they die by the government cuz they keep raising the age of retirement and if you go on early retirement you get almost nothing from NIC, at least not enough to buy food AND pay your bills along with the medication and healthcare that you will need when you get older.
These people are completely disconnected from the reality regular people have to deal with and it’s obvious they do not care because their pension and salaries are all A++ and guaranteed. Fk them and fo the NIC