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SSB holds consultation on proposed increase of contributions

The Social Security Board hosted the media this morning in Belize with the objective to engage members of the media and provide accurate information on the Proposed Wage Ban increase. The SSB has launched a nationwide consultation with stakeholders with the purpose to receive feedback in regards to a possible increase of social security contributions for employees. Love News spoke with the CEO of the SSB, Dr. Colin Young.

CEO of Social Security Board, Dr. Colin Young.

“No it won’t affect all workers as I said it’s only going to affect those workers who are earning more than $320 a week. There are about 40% of our contributors based on our data that are making more than $320 a week so 60% of the people who contribute to Social Security won’t see an increase whatsoever and right now the highest ceiling is $320 and the ceilings increase by $40 each ceiling. So for example if I’m making $350 under the new proposal my weekly contribution will increase by $1.60 under this scenario. If I am making more than $520 dollars under this proposed 50/50 split scenario then my weekly increase would be $8 dollars and the employer’s increase would be $8 per employee per week over that ceiling but if you as you just mentioned for the agriculture sector and so those employees don’t make more than $320 so they will have no impact on the employees that are making less than $320. Now as I was showing in the presentation when an employee gets sick social security pays you only $320 and we pay 80% of that so it doesn’t matter how much you make for the week because if you’re making $2,000 a week and you are going to get sickness benefit from Social Security your wage band is capped at $320 and we pay 80% of that which is $256 and so people say ‘well I can’t live off $256 because my salary is $2,000. What we are proposing here if you are now making over $500 assuming that this amendment occurs then you would be collecting $416 for the week as opposed to the $265 and the same thing with your pension your pension would also increase as well so for the employee there is clear benefits for the employer they would see it as an increase in the cost of doing business.”

According to Dr. Young, if the amendment does not go through all the readings, in four years SSB’s income will be less than its total expenditure putting the fund at risk.

CEO of Social Security Board, Dr. Colin Young.

“That means now that Social Security will have to liquidate its investments to pay benefits that is why you don’t want to get there, that is why this amendment has to be done so that we can ensure that don’t reach what we call the period of equilibrium. Right now as we’ve said the only saving grace of the fund is really the return on investments that we get. Last year we made about $26 million dollars on our investments but because we are running a deficit this year we are running an $11.3 million deficit with contribution revenues relative to expenditure and so we’ve had to take money from the investment income to balance. Well what happens when your total expenditure exceeds both your contribution revenue plus your investment income that is the period of equilibrium the actuary is telling us that is about four years because every year we have about 10% increase in the number of pensioners who qualify for a pension that we now have to ensure that money is there to pay them their pension.”

Dr. Young is hopeful that the amendment is approved by next year.