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Social Security Board headed for disaster

By Benjamin Flowers

The Social Security Board (SSB) said this week, that the fund could collapse in four years if there isn’t an increase in contributions.
The SSB held a media mixer this week, giving a breakdown in its financials, and explaining the importance of revisiting the contribution scheme. The SSB explained that the contribution scheme has only been revisited once since its inception in 1981.

The board explained that with the growing number of pensioners, longer life expectancy of pensioners, reduced returns in interest from the banks, and increases in payouts for sickness benefits, the fund needs more money by way of contributions to be able to sustain the increasing demands.

“This year everything will be constraining every year and the following year more constraints until the breaking point come and that will be a very serious thing. Because the more we delay the amendments, the more drastic the amendment will require down the road,” explained Hernando Perez Montas, Actuary at SSB .

SSB Chief Executive Officer, Dr. Colin Young, explained that the proposed increase will affect those who earn $320 and over per week, which the SSB says is around 40% of the contributors into the fund. Those who earn up $319 dollars a week will not pay more.

“So if you are paying $9.55 now and this was to be approved, you will go from $9.55 plus $1.60 is your weekly contribution will now be $11.15. Under this split 50/50 the employer will also be paying the same $1.60. So the employers cost will go up from $16.05 to $17.65,” Young said.

He added that the proposed increase has raised some concerns from employers, because they will match the increase that workers pay; however, workers will be able to benefit from increased contributions. Young said that after months of consultations, employers are of the belief that if workers are to benefit from the increase in contributions, then workers should pay more, instead of sharing the increase 50/50 with employers.

The SSB is continuing its consultations and hopes to have the new scheme in place by February 2018.

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