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When Will Social Security Come Back To Take More From Your Pay?
posted (June 18, 2019)
But, all the politicking aside, today's press conference did give the media an opportunity to ASK when workers should expect them to come back and ask for yet another increase in contributions.

If the increase went immediately from 8% to 10%, it would mean that the SSB would remain viable for another 10 years before they would need to request another increase. However, the social partners rejected that, and, after a back-and-forth, the two sides agreed that a phased increase would be more easily digestible. The final decision is that come next month, you will start to pay 8.5%, and in 2020, you'll pay 9%. By 2021, the final increase kicks in, and you'll be expected to pay that 10%.

It gives the contributors an ease into this transition, but it also means that SSB won't be generating the sum of money needed to delay another increase for a longer period of time. Today, the CEO explained that this is only a short-term relief, and by 2024, or 2025, the contributions will need another increase to protect the Fund:

Dr. Colin Young - CEO, SSB
"Recall that the initial proposal that we made was that we wanted to do the 8% to 10%, and then from the $320 ceiling, which the maximum we ensure, to $520. Under that scenario, the actuary was advising that we would get about 12 years - again, go back to the normal cycle within social security systems. Unfortunately, that optimal situation was not accepted by the social partners. And, so, what we had to do was to find something that we would agree to, but that had an implication. And the implication is that we get fewer years, right. We went from 10 to 12 years, to now about 4 to 5 years, all else being equal. But, it makes the point again, that because we took so long to do an increase, and when we do an increase, it's a small, incremental increase, because of the half, half one, then what is happening you're not getting the normal length of time, from the increase. One of the areas that can over-perform, for example, the more income we receive from investments, over the next few years. That can have a material impact on delaying the next period of equilibrium. But, based on the analysis that we've done, based on the projections the actuary has done, and based on what we've shared with the social partners, this legal amendment to increase the contribution is a short-term fix."

"What would happen after 2021, we accumulate some funds this year. We accumulate funds next year, but starting in 2021, we start to increase the payout."

So, what is the SSB doing to reduce their executive bloat, and operational inefficiencies? That was a big topic that the unions and the business community wanted them to address, since employers and employees are being asked to pay more. The CEO says that they have a plan for the next 5 years that will save SSB approximately 23 million dollars. Here's are his comments from that part of the press conference:

Dr. Colin Young - CEO, SSB
"We've put in place a plan that would see SSB become more efficient, over the next 5 years. In fact, we've presented a plan that showed them that we would save essentially, almost 23 million dollars in operations costs by 2025 from a number of actions that we're doing. One of them is that we had rationalized and looked sub-offices we had country. Part of the reason why costs are high is that SSB maintains fully functional offices in every district, in some of them, 2. Like for example, in Stann Creek District, we have a branch in Independence, and one in Dangriga. And so, we closed the sub offices we had in the Free Zone, in Spanish Lookout, In Caye Caulker, and other places, and we valued that cost over 5 years. We also looked at the cost for the replacement of Social Security cards. We also undertook an energy efficiency project by saving electricity, by going to LED bulbs in the offices. And that has been demonstrating savings. We looked at he direct deposit service. The banks were charging us to charge every single cheque. We now, October 1st, last year, we went to mandatory direct deposit. That saves the fund $13,000 a month because of the difference in fees between cashing a cheque, as opposed to having Atlantic Bank, through the Central Bank system to send that money to person's credit union or bank account. We also demonstrated to them that we've put a moratorium on hiring new staff at the low levels, because of the financial cost."

The CEO also discussed how SSB funds were used to roll-out the NHI program until it was stopped. That cost contributors 43 million dollars out of the fund, but the Government has since taken over that over financial burden.

And from the time it was started in 2003, the pro-poor program called the non-contributory pension has cost SSB Another 48 million dollars and counting. There is an impending proposal to the Barrow Administration for them to also take that over in 2 years time.

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