Consultations: SSB Contribution Reform
In the typical cycle of any Social Security program, reforms or adjustments in collection revenue or contributions are imperative to ensure sustainability of the Fund. These modifications are usually made periodically or every three to five years. However, the last amendment made to our Contribution program was in 2001 when our insurable earning ceiling was increased from $130 to $320.
Our Social Security program has grown significantly over these 17 years and presently has a population of 106 thousand registered persons. In addition, we have enhanced our services in several areas such as funding a non-contributory pension program, passing legislation to pay 2 pensions at a time and increasing pensions by 5%, while facing rising life expectancy ages. Despite this, SSB has not made any adjustments to its collection revenue.
These augmentations in benefits and services has brought the Fund critically close to a ‘period of equilibrium’ where total income equals total expenditure. Consequently, the need to reform our contribution schedule is now upon us. In late 2016 and into 2017, SSB embarked on country-wide public consultations to start the process of engaging the general public on this important issue. In 2017, we continued with the consultation process by targeting stakeholder groups such as the Belize Chamber of Commerce (BCCI), the National Trade Union Congress of Belize (NTUCB), other Associations and the Opposition.
We presented a proposal which reassured our partners that the proposed increase would not affect the present amounts being paid by workers and employers in the first instance so only persons who earn more than $300/wk are being asked to pay more with a subsequent increase in both short-term and long-term benefits. A proposed increase of the contribution rate by 2% to 10% in 2020 is also being recommended.
The proposition was generally well-received; and while our stakeholders agree with the recommendation to make these critical adjustments, they differ on the strategy for implementation. We have received feedback from our partner representatives and continue to work with them to agree on a plan for implementation.