By John Denny Observer Reporter
(Occasions, Nevis) – The Department of Social Security has been holding a series of meetings this year seeking input from the public on possible reform measures that could keep Social Security viable into the future. Earlier this week, Chairman of the Social Security Reform Committee, Elvin Bailey, held a Youth Symposium on Social Security Reform to gather input from future contributors. The need for reform stems from the fact that without changes, the future of Social Security is in question. “Social Security has some challenges that could cause the depletion of its funds down the road,” said Mr. Bailey. The age of the population in the Federation is increasing demographically. With this comes a shift in the amount of money going into Social Security as opposed to how being paid out. Right now, Social Security has over $900 million in assets and this number will continue to grow for a few years, but then it will begin to deplete if reforms are not put in place” – and the sooner the better, officials believe. Monday Online Code for Issue # 736 is BUE Mr. Bailey has been holding two to three meetings a week throughout the Federation since January. The meetings have been educational to the public as well as to Social Security. Public input has revealed that the contributors are willing to have some adjustments made to their benefits and are willing to tolerate a slight increase in withholdings. The most popular idea in reform is raising the retirement age from 62 to 65, but doing so incrementally. “Right now Social Security is strong. The fund is stable and well managed,” said Mr. Bailey. “In fact, it is probably one of the best managed programs in the Federation. It is the future that we are concerned with. We have been doing this as an effort in consensus building. We were discussing this with youth groups in St. Kitts last week and this week we came to Nevis.” Through charts and graphs, Mr. Bailey explained to the public how in years to come Social Security’s viability will weaken. “Our population is aging,” Mr. Bailey said. “This means the ratio of contributors to aged pensioners is declining and will continue to decline. Any change now would control the erosion of the system, whether it would be a higher deduction or a reduction in the number of benefits paid out. The purpose of the meetings has been to determine from the people what they would be willing to accept.” Social Security works on a matching scale. Five percent of worker’s wages are withheld. That five percent is matched by the employer and another one percent is matched by the government. Employers are required to register within seven days of becoming an employer and begin withholdings within 14 days of an employee starting work. The main purpose of the Social Security Fund is to provide relief for loss of income for insured workers and their dependents due to age, sickness, invalidity and death. Social Security keeps its assets in investment funds, banks and loans to the government. “Yes we loan money to the government and at a non-preferential rate of seven percent,” he said. “It is a good investment, because they pay and they are current.” Social Security’s return on its investment portfolio is currently eight percent and interest returns from what is held in banks is 6.5 percent. By law, Social Security must be diversified in its investments by having no more than five percent of its assets in any one institution. Most of the assets are spread throughout different banks, but they have recently been taking advantage of the downturn in real estate by buying potentially lucrative property prime for development on both Nevis and St. Kitts. Social Security has a policy of annually contributing $100,000US to the government for specific projects, $70,000US to St. Kitts and $30,000US to Nevis. An example of this is the contribution towards the new disposal truck received by the Nevis Solid Waste Management Authority.
