Minister On Salary Increase For Public Officers

“I rise today to share with this Honourable House the details of an agreement reached with our six union partners representing seven bargaining units in the public service regarding salary adjustments for public officers,” Minister for the Cabinet Office and Digital Innovation Diallo Rabain said.

Speaking in the House of Assembly today [March 21], the Minister said, “The union partners included:

• the Bermuda Public Services Union,
• the Bermuda Industrial Union,
• the Bermuda Union of Teachers,
• the Prison Officers Association,
• the Fire Services Association, and
• the Bermuda Police Association.

Minister Rabain added, “For the fiscal year 2024/25, public officers received an increase of 4.81%. A payment schedule from April to August has been established, with each group receiving retroactive salary adjustments in line with the scheduled release of funds.

“In 2025/26 and each subsequent year of the agreement, the inflation uplift will be calculated based on the previous calendar year, estimated at 2.5%, along with a pay disparity of 2.31%, an additional contribution to the Public Service Superannuation Fund [PSSF] offset estimated at 0.67% per annum, and a GEHI offset of $50.00 per employee per month, equating to $600 per employee per annum.

“The Bermuda Government is the largest employer in Bermuda. The decision to increase public officer salaries considers economic stability and social equity. Public officers play a crucial role in the functioning of the government and the delivery of essential services. Ensuring their salaries keep pace with inflation is important for maintaining economic stability. Fair compensation helps sustain purchasing power, thereby fostering consumer spending and stimulating economic growth.”

The Minister’s full statement follows below:

Mr. Speaker,

I rise today to share with this Honourable House the details of an agreement reached with our six union partners representing seven bargaining units in the public service regarding salary adjustments for public officers. The union partners included:

• the Bermuda Public Services Union,
• the Bermuda Industrial Union,
• the Bermuda Union of Teachers,
• the Prison Officers Association,
• the Fire Services Association, and
• the Bermuda Police Association.

This negotiation process commenced in November 2024 with Interest-based Bargaining Training and concluded in February 2025 with an agreed framework that acknowledges the contributions of public officers and addresses existing pay disparities relative to the cost of living.

Mr. Speaker,

Honourable Members may recall that in response to fiscal pressures over the past decade, the Bermuda Government adopted several austerity measures aimed at reducing public spending and improving financial stability. One of the most impactful measures was the implementation of salary freezes for public service employees. These freezes effectively halted salary increases, preventing wages from keeping up with inflation and the rising cost of living. Specific actions have included:

• Suspension of annual cost-of-living adjustments
• Freezing of salaries
• Introduction of hiring freezes, resulting in increased workloads for existing employees
• Changes to pension and benefits schemes, often resulting in increased employee contributions; and the
• Introduction of voluntary early retirement programmes

Mr. Speaker,

The austerity measures implemented in Bermuda have had profound impacts on the public service workforce. Collectively these measures have created a complex and challenging environment for public service employees.

Mr. Speaker,

The unintended consequence of these strategic, cost-saving measures is a heavier workload for existing employees. With fewer staff to share the responsibilities, employees have faced increased pressure to meet their job requirements, leading to burnout and decreased productivity.

Mr. Speaker,

The hiring freezes of the past have significantly impacted recruitment efforts in the public sector today. With the introduction of these freezes, the ability to attract and onboard new talent at the pace now required has been severely hampered. The Service is currently facing challenges related to recruitment activities. The lack of new recruits means that existing employees must fill multiple roles, which can further strain resources and reduce overall efficiency. Records show that there are currently in excess of eight hundred vacant funded posts in the Service.

Mr. Speaker,

Austerity measures have aimed to stabilize Bermuda’s fiscal health but have created challenges for public service employees. It is crucial, therefore, to address these impacts thoughtfully to maintain efficiency and morale in the Service and to ensure fairness.

Mr. Speaker,

In recognition that public officer uplifts had significantly lagged the Consumer Price Index [CPI], the negotiating team entered negotiations with a mandate to achieve a fair and equitable outcome.

Mr. Speaker,

The agreed framework for the cost-of-living adjustments for public officers will utilise the year 2014 as the baseline for determining annual pay award rates. This framework considers planned increases to pension contributions, planned increases to Government Employees Health Insurance [GEHI] contributions, and the annual Consumer Price Index [CPI] during the review period. The salary disparity adjustment represents the difference between the CPI and historical actual pay.

Mr. Speaker,

The difference between the CPI and actual pay increases from the 2014 base year to the end of 2023 will be distributed to staff over a four-year period. The fiscal years included in this agreement are 2024/25 through 2027/28. For the fiscal year 2024/25, public officers received an increase of 4.81%. A payment schedule from April to August has been established, with each group receiving retroactive salary adjustments in line with the scheduled release of funds.

Mr. Speaker,

In 2025/26 and each subsequent year of the agreement, the inflation uplift will be calculated based on the previous calendar year, estimated at 2.5%, along with a pay disparity of 2.31%, an additional contribution to the Public Service Superannuation Fund [PSSF] offset estimated at 0.67% per annum, and a GEHI offset of $50.00 per employee per month, equating to $600 per employee per annum.

Mr. Speaker,

The uplifts to offset additional employee contributions to the PSSF and GEHI are targeted to address funding shortfalls, aligning with actuarial recommendations and will help to support the longer-term sustainability of our public pension funds, that the Honourable Premier addressed in his statement earlier.

Mr. Speaker,

The Bermuda Government is the largest employer in Bermuda. The decision to increase public officer salaries considers economic stability and social equity. Public officers play a crucial role in the functioning of the government and the delivery of essential services. Ensuring their salaries keep pace with inflation is important for maintaining economic stability. Fair compensation helps sustain purchasing power, thereby fostering consumer spending and stimulating economic growth.

Mr. Speaker,

By providing an increase, the government aims to address the effects of rising prices on its employees, ensuring their standard of living is not eroded. This approach reduces income inequality and establishes the public service as an employer of choice.

Mr. Speaker,

Competitive compensation packages are vital for attracting and retaining skilled public officers. Justifiable cost-of-living increases demonstrate the government’s recognition of its employees’ efforts, resulting in enhanced performance and lower turnover rates. Sustaining a stable workforce benefits both the government and the public we serve.

Mr. Speaker,

The agreement with our Union partners marks a further step towards recognising the contributions of public officers and addressing the financial challenges they face. It highlights our commitment to ensuring fair compensation for those who serve the public.

Finally, Mr. Speaker,

I inform this Honourable House about the work to modernise the job evaluation scheme and establish a new salary structure for the public service. This initiative aims for fairness, transparency, and alignment with workforce needs and public expectations. PwC has completed its engagement, and implementation planning has progressed significantly. In the coming weeks, I shall provide further updates on our advancements and next steps.

Thank you, Mr. Speaker.

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