The Belize Chamber of Commerce and Industry (BCCI) is not supporting the Social Security Board’s proposal to increase contributions. Last year, the SSB began a countrywide public consultation with regards to the possibility of increasing employee’s contribution and benefits to the scheme. The SSB’s reasoning is that if the contributions increase so will the benefits. But that’s not the only things that will increase. During its annual general meeting, BCCI discussed the issue and President Nikita Usher says that increasing contribution to the fund will increase the cost of doing business.
Nikita Usher, President, BCCI: “The chamber has also voiced its concern to say that we do not support such an increased position at this point in time we would prefer to have a phase in approach as opposed to a full fledge increase as to what has been proposed by the Social Security. Well automatically if you understand how Social Security works currently there is a split between what the employer pays and what the employee pays, they are proposing to move the threshold of the $360 that is insurable income now to as much as $520 and they are proposing that that $520 share that we used to pay for example $25.60 the employer would be paying $16.05 and the employee would be paying $9.55 that is for somebody who is earning in excess of $300 a week. Now taking that up to $520 a week and that $25 will now change, I don’t recall the number off the top of my head but I know it will be increased. The proposal is that that increase will now be shared on a 50/50 or a 45/55 split between employer and employee. So automatically the cost of doing business has now increased. It will cost for example where I work CPBL it would cost us an additional $130,000 per year. So automatically you are seeing where that bandwidth and that is just one business I’m sure that it is going to cost government substantially higher than that because government is the highest employer at a time when the economy is shaking, scrambling.”
Usher says that the best option is to gradually implement the increase.
Nikita Usher, President, BCCI: “The other side of the equation is that the fund is going to be in dire need for money within the next two years meaning the fund meaning what has been put aside for when we have retired people etc because what’s going to happen very shortly is that you are going to have a bulk of people going into retirement and the fund is going to come under tremendous pressure to be able to fund that. It is what you call an actual evaluation or evaluation of the funds. A foreign evaluation had shone that by the year 2020 I believe that fund will come under tremendous pressures and so it’s important then that the fund needs the money yes but there is also the other side of the equation where we see say that the fund is more for an employee to retire and retirement fund is normally funded by an employee entirely. Currently the way it is worked out now employers are funding a portion of it and we’re not saying that we should not, we’re saying that it should be a gradual process to where we get moving and have a fund be funding by the employees and therefore at some point then we have to decide at what point the cost then can be shared in a different way.”
The last time employees saw an increase in their contributions was in 2001.