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Jun 19, 2019

Another Social Security Increase is Expected in 2025

An increase in the social security pension scheme was rolled out in 2003, seventeen years ago. The fund is at the point where its total expenditure equals total revenue. During the two-year consultation, officials from the Social Security Board met with several entities and groups, including the Belize Chamber of Commerce and Industry. The private sector agreed conditionally to the increase, as it is expected that the S.S.B. would do its best to cut unnecessary costs in all corners of administration and operations. According to C.E.O. Doctor Colin Young, millions of dollars are expected to be saved in the next few years.

 

Colin Young

Dr. Colin Young, C.E.O., S.S.B.

“The Chamber’s position including the labor’s side is saying, the reason we are here today wanting an increase and why the quantum of the increase is what it is, is because there has been inaction in the last seventeen years. When the actuary first started to advise that we need to do something to maintain the sustainability of the fund, if actions were done then invariably the cost would have been less. They recognized that we needed to do this increase but they wanted to ensure that there were certain things that S.S.B. was doing to be cognizant of administrative cost. So what we did is that we were able to demonstrate to them that we have put in place a plan that would see S.S.B. become more efficient over the next five years. In fact, we presented a plan that showed them that we would save essentially almost twenty three million dollars in operations cost by 2025 from a number of actions that we are doing. One of them is that we had rationalized all our sub offices we had in the country. Part of the reason why costs are high is that S.S.B. maintain fully functional offices in every district. The IMF has recommended that S.S.B.’s rate for long term sustainability goes to thirteen percent. We are at eight percent right now. They are saying that there are other parametric reforms that had to be done. Things like looking at increasing the retirement age, things like looking at the number of contributions that you have to make to qualify for a pension, looking at your administrative cost. That is why I think that there was understanding among the partners that let us act when we still have some flexibility in determining increase that we can live with in the short term.”


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