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Sep 7, 2017

S.S.B. and the pensioner problem

So, the S.S.B. wants to increase contributions for the forty percent of its insured persons. Those persons earn between three hundred and twenty dollars to five hundred and twenty dollars weekly. At this time, it is a proposal and C.E.O. Colin Young explained that the S.S.B. fund is reaching its maturity and with the number of pensioners, growing by over eight percent per year, these contributors are now reaching retirement age which means that S.S.B. will now have to pay them. Young explains.

 

Colin Young, CEO, SSB

Colin Young

“What I want to show you here is our financial position as of last year; our audited financials as of 2016.I want to draw your attention to the colors. The blue is our total expenses at Social Security which is our operational expenditure, plus the benefit payouts and you will notice that in 2016, we collected 80.1 million – that’s the green, in contributions, but we paid out our expenses – operational, plus benefit payout, was 83.5 million. So, you see that in 2016 as it relates to contribution revenue, we are running a 3.4 million deficit in 2016. The projected numbers for this year is that we would collect from the contributions about 81 million in revenues for the year 2017, but notice that our overall expenditure, operational expenditure, plus benefit payout, is going to be 92.4 million, meaning that we will actually have a 11.4 million dollar deficit for this year as it relates to contribution revenue versus total expenditure. Why is this happening? What you see here in this slide, again, red is benefit expenditure, no administrative or operational expenditure in this; green is revenue. Two things, you note that our income from contributions increase quite gradually while expenditure, the rates are increasing quite faster. For example, we know for a fact that that the number of pensioners are increasing between 8-10% per year. The fund is reaching its maturity; it’s 35 years old. Those people who started to contribute all are now reaching retirement age and not only are they reaching retirement age, but they are also living longer and when they live longer, it means they collect a pension for longer and ultimately that is why social security is there, because we need to ensure that for as long as they are alive we need to then provide them with that retirement pension. As you just saw our liability does not end with the death of the insured persona because if they have a wife or kids, we pay survivors’ benefits. In 2003, we had about 4,500 or so people who are collecting a pension. As of 2016, notice we are about 9,800 pensioners. So we are more than doubled the number of pensioners in about 10 years and every year we can expect about 10% more so we are talking about close to another 1,000 people that may be on pension next year that we have to pay retirement benefits to.”

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