Some people are called to make sacrifices for their country. My call to sacrifice was to attend the Joint Technical Meeting of Commissions and Sub-regions of the Inter-American Conference on Social Security from September 23″ 25.” I was part of a 3 person team headed to Cuba.” My specific task was to wade through some intense presentations ” almost all in Spanish, learn lessons and apply these lessons to my current assignment of Reform of our Social Security System. I left Nevis on Saturday night and on Sunday travelled to Jamaica via Antigua; over-nighted in Jamaica and headed to Cuba on Monday at midday. Oh the joys of hassle-free Caribbean travel and of less than pleasant immigration checks! Seventeen countries were represented at the conference to discuss reform of [National] Health Insurance systems (which we do not have yet), the elderly (whom we have), actuarial studies (which we do every 3 years) and Pension Reform (which we are currently undertaking). Ten of these countries made presentations, describing the situations that they faced and how they addressed the challenges. It was amazing for me to note that for Pension [Social Security] Reform, the challenges they all faced are eerily similar to those that we are facing now ” design challenges, increased life expectancies, aging populations, changing job markets, fund depletion, etc., etc.” Yet all presentations ended upbeat ” the challenges were faced and conquered. Each country found a best fit to suit its situation and “rescued” its Social Security.” It was amazing; there are crystal balls after all! Similar to these territories, whenever we broached the subject of the life expectancy of our Social Security Funds, people baulk at the idea that assets have a ‘shelf life” and refused to accept that our assets, large as they are, could ever run out.” I have decided, therefore to take another look at our situation, analyzing it from the standpoint of income and outflows by new members. That is, to study the impact of new members coming in and outflows to new beneficiaries. And I will restrict the discussion to two long term benefits ” age and survivorship. Last year, 2007, membership in Social Security grew to 24,726 insured persons, with a registration of 1,643 new members (1,433 employees and 210 self-employeds).” Of our total membership, 20% were young persons ” younger than 25 years old, and their wages totaled $70.2million.” This was 11% of the Federation’s annual payday of $648million.” The 1,644 new persons who registered represented a growth slightly higher than 7%. Such growth is good.” However, these new people yielded EC$156,210.00 to the overall Fund. This represents 0.25% of the EC$64.7million of contribution income that was generated through contributions for the year.” This is because slightly more than half of all these new entrants are younger than 25 years old, and, by virtue of them being young, are at the lower earning end of the wage spectrum.” By contrast, there was a net increase of 129 age pensioners who were paid EC$2,060,528.00.” There were also 64 new age grantees (they who receive the one-off payment at age 62) and were paid EC$173,177.00. Survivors increased by 14 and they received EC$40,833.00.” New payments therefore amounted to EC$2,274,538.00, or 3.6% of the contribution income for the year.” The evidence shows that this is an increasing phenomenon. As a reminder, total benefits payment for 2007 was EC$30.5million i.e. forty seven cents of each dollar. Let me try to put this newness in perspective.” For every ha”penny received from new members, we spend 14 cents from somewhere else. That somewhere else is that group of “regulars” that form the core of our pool. To date, we are actually spending 50 cents of every contribution dollar in benefits and climbing.” So while we have a _” clogged pipe bringing in money, we have a bulging 4″ free flowing pipe taking it out.” That is why we are so aggressive in pursuing all contributions due, and why we must also strive for a forward march.” Maintain and advance, that is the strategy and the tactic all in one! If Cuba taught me nothing else, it reinforced for me that our solution must come from within.” Nobody can fix it for us. But again, it will take dialogue, it will take time, it will take cohesiveness, it will take political leadership and it will take direction.” We are on the right track! Someone told me recently that they get angry when they read of the state of affairs at Social Security.” Good! Get angry, but not paralyzed. Do something.” Talk. Encourage people to pay up. Report slackness when you see it.” Hold us accountable.” Educate yourself. Empower yourself. In terms of the discussion on the other agenda items, I learnt that some effects of aging are controllable because 65% of the effects of aging are environmental.” By 2025 more than 50% of Panama’s population will be old ” right now 11% of its insured population is old and consumes up to 33% of their health expenditure. Eventually, we may be able to present comparable data for St Kitts-Nevis, but for now, all that is reportable is that about 6% of our insured population was between 55 and 62 years old as of 2007. In this fast paced world, actuarial study ought to be done every year.” The tree year assessment is insufficient. Finally, a word about National Health Insurance.” We were told that the largest consumers of Health Resources are persons younger than 16 and older than 60; that women require more health services during their productive years (reproductive?), and that about 230 million persons world wide do not have Health Insurance and 125million are without access to any health care at all.” Aren’t we doing well in St Kitts-Nevis? We were also warned that the provision of Health Insurance is very expensive, and that more health facilities does not necessarily mean better health for the population, and that sometimes caring rather than healing is what is required. Cuba is a lovely country, but we didn’t see much of it. We were too busy espanioling!
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