Social Security Accounts for 2010 laid in National Assembly, Minister Condor outlines way forward for continued sustainability
Deputy Prime Minister and Minister of Social Security, Hon. Sam Condor laying the Social Security Accounts for 2010 in the National Assembly on Thursday. (Photo by Erasmus Williams)
BASSETERRE, ST. KITTS, NOVEMBER 11TH 2011 (CUOPM) – The Accounts for the St. Christopher and Nevis Social Security for the year 2010 were laid the National Assembly on Thursday.
The Accounts was laid by Deputy Prime Minister and Minister of National Security, the Hon. Sam Condor.
In a recent radio address, Minister Condor come February next year, the Social Security Scheme will be making a solid contribution to the overall development of the people of St. Kitts and Nevis and the Nation for 32 years.
“It has been 32 years of progressive and sound management, that has pushed our Fund’s ranking, according to a study of Social Security Funds in the Region, to the second largest in the Caribbean,” said Deputy Prime Minister Condor. He declared that the Investment Portfolio of the Social Security Scheme has contributed, in no small measure to this achievement.
“The Fund has undergone tremendous growth, from EC$15 million in 1978 to its present status of just over EC$1.2 billion,” said Mr. Condor.
Stating that it was useful to explain the rationale for the reform and increased emphasis on the Investment Portfolio of Social Security, over the last few years, Minister Condor noted that as is the case with many programmes all over the world, the retirement age is below life -expectancy; thereby requiring more cash to sustain the System.
In St. Kitts and Nevis, the retirement age is 62, while life- expectancy is 72 for men and 78 for women and increasing.
“In fact, Public discussions organized by the Board, leading up to the last two Actuary Reviews and indeed the Reviews themselves, revealed that reform was necessary, for the sustainability of the Fund beyond 2023,” Deputy Prime Minister Condor pointed out.
He said the St. Christopher and Nevis Social Security Board has been advised that the demand for additional finance could be met only in a limited number of ways.
“(1) an increase in contribution rate, (2) an increase in the number of contributors, (3) a reduction in benefits, (4) a reduction in the period for receipts of benefits, (5) an increase in investment returns and (6) a reduction in administration expenditure,” said the Social Security minister.
Mr. Condor said that the Board clearly understood the imperative for a coherent policy to deal satisfactorily with the growing demand and the discussions/debate among members of the Board of Directors came down to the level of ease in effecting those options, and eventually settled on the following three:
“(1) diversifying the Investments Portfolio to optimize returns; since the traditional investment strategy yielded minimum returns; (2) increasing compliance rate of Employers, including the self-employed and (3), reducing the administrative costs
“I believe it may be useful also, to here inform/remind that the Social Security Act limits Overseas Investment to 1% of the Fund, in keeping with the vision, the holistic view, and the pragmatic and deliberate approach by our Founding Fathers, to this instrument of social cohesion/social justice. The record will show that we have benefited in large measure from the Actuary and Stakeholders discussions and advice on this all important matter,” said Mr. Condor.
He said that the emphasis on Real Estate Investment, undertaken under the purview of the Investment Committee, which was established under Section 17 (1) of the Social Security Act, has to date, yielded significantly higher returns.
The present Investment Committee is comprised of the Chairman, a Senior Member of the Ministry of Finance; the Chief Financial Officer of Social Security and two other Board Members.
Putting in perspective, the whole issue of Investment in Real Estate, inclusive of Housing Projects, the Social Security Minister stated that “to date the Real Estate Portfolio includes the Church Street and Liverpool Row Properties, Winter Forest in Nevis, Scotch Bonnet/South East Peninsula, Fountain Estate, Pinney’s Estate in Nevis, Franklands and Dewars Estate/Beacon Heights Project in St. Kitts.”