Pensioners - Old Age Contributory Grant/Pension
“You can receive an NIS Pension from 60 yrs but this will increase by 6 months every four years from January 1, 2006”
Increase in pensionable age
Since January 1, 2006, the pensionable age was increased from 65 – 67. This measure sees an
incremental increase by 6 months added to the pensionable age every four years, and will reach 67 on January 1,
January, 2006 the pensionable age would be 65 years, 6 months
January, 2010 the pensionable age would be 66 years
January 2014 the pensionable age would be 66 years, 6months
January 2018 the pensionable age would be 67 years
January 1st 2003, Pension Reform brought about changes including the introduction of flexible
This means that you can retire at any age between 60 and 70.
For more information visit the Pension Reform site.
Grant or Pension?
Old Age Contributory Grant
To qualify for an old age contributory grant you must be of pensionable age and have at least 50 contributions
paid or credited to your account. The grant is a lump sum payment.
To receive a pension you must have at least 150 contributions actually paid into your account and a total of 500
contributions paid or credited to your account
How is the grant calculated?
It’s equal to 6 weeks’ average insurable earnings for each 50 weekly contributions actually paid or credited to
your account. It is a lump sum equal to 6 weeks average insurable weekly earnings for each 50 contributions
actually paid or credited to the insured person’s account
What’s the calculation for pension?
Important points to note:
• There is an Old Basis Pension Calculation and a New Basis Pension Calculation implemented January 1,
• Pension calculations therefore depend on an applicant’s age on December 31,2002, the day before Pension Reform was implemented
There are 3 different bases on which the NIS pension is calculated:
If you were 56 years or older on December 31, 2002 your pension would be calculated using the Old Basis
If you were under 47 years old on December 31, 2002, your pension would be calculated using the New Basis Pension Calculation.
Those not falling into either of the above categories i.e. those whose ages range between 47 and 56 will use 50%
of the New Basis Pension Calculation and 50% of the Old Basis Pension Calculation
Old Basis Pension Calculation
The annual rate is calculated as 40% of your average annual insurable earnings. It is supplemented by 1% of the
total insurable earnings on which contributions were based subsequent to the first 500 contributions paid or
credited. 60% of average annual insurable earnings is the maximum pension you can receive and since in 2020
$243 per week is the minimum.
New Basis Pension Calculation
The pension is calculated based on contributions paid over the insured’s work life, and the annual average
insurable earnings over the best five years.
The average is calculated by taking 2% per year of the average annual insurable earnings for the first 20 years,
the 1.25% for the remaining years.
This pension is also capped at 60% average annual insurable earnings. 50 weeks of contribution is equivalent to 1 year.
For more information download the Guide to Benefits booklet which you can view in Adobe Acrobat. If you
don’t have Acrobat, click here to download it.
Barbados Association of Retired Persons