The Antigua & Barbuda Social Security Board (ABSSB) continued to experience fiscal challenges during 2011 caused by the turbulence in the international financial sector. The most susceptible areas of the ABSSB that were impacted were that of collections, compliance and benefit payments.
The year was marked by a reduction in the labour force market due to unemployment. Moreover, fiscal year 2011 was characterised by greater demands for our services and improvements in our service delivery. There was a notable moderate growth in benefit payments, approximately $85 million, despite a material decline in the number of persons claiming and receiving benefits under the ABSSB system.
Employers and self-employed persons continued to support the system, though assisted by our ever-vigilant inspectors which resulted in contribution income amounting to $69,436 million. The ABSSB’s investment return was somewhat better than the previous year, however our asset base declined by 1.8%.
The following indicators highlight the ABSSB’s performance for fiscal year 2011: -
- Funding ratio – 7.1
- Approximately 7,912 persons were in receipt of a monthly pension
- 736 former contributors became pensioners
- No old age assistance benefits were awarded
- 253 persons exited the system as a result of death; 41.1% (104) were pensioners
- Staff-related expenses accounted for approximately 76.1% of total administration expenses
- Registration activity: 1,748 new employee registrants; 389 newly registered employers; 406 registered self-employed persons
- Active insured population – 40,496 employees, i.e. contributors aged 16-59
- Total assets $677.1 million
- 6,490 letters of good standing processed – immigration letters = 2,877; labour letters = 3,613; generating a minimum of $194,700
These performance indicators have highlighted the grim outlook for the ABSSB and the consequent challenge for the ABSSB to meet its obligations to its beneficiaries in a timely and responsive manner. To mitigate this situation, it is imperative that the board of directors formulate meaningful policies for implementation, in conjunction with the strategic interventions emanating from the pending ninth actuarial review along with stochastic projections to assist in buffering the ABSSB at this most critical time.
Another major intervention would be for the ABSSB to adopt a triangulation approach inclusive of an investment re-engineering strategy, intensification of the levels of compliance and improvement in operational efficiency which probably will place the ABSSB in a more sustainable position.
In addition, the demographic challenges resulting from the ageing population, reducing fertility rates, high HIV/AIDS incidences, increasing life expectancy rates and net migration rates continue to impact the institution contributing to declining contribution income while increasing benefit expenditure. As such, a substantial financial injection is required along with necessary amendments to the Social Security Act & Regulations to support the necessary parametric changes required to ensure the survival of the system.
Alarmingly, there are other challenges that need to be considered. One such challenge pertains to the general performance of the labour market, where unemployment is increasing and this trend is expected to continue. This will most likely result in the expansion of the self-employed market which may lead to further evasion of social security contributions.
These challenges are grave threats that require mitigating actions, soonest; otherwise, the unthinkable will happen where ‘an increasing proportion of the elderly [will be] excluded from the benefits of a pension’ [as a result of a] relatively low contribution rate of 8.0% and retirement age (60 years). Further, these challenges have placed the ABSSB in a rather precarious position especially as the number of contributors per pensioner, inclusive of invalidity and survivors’ pensions, is declining at an alarming rate from 5.7 in 2010 to 5.1 as at December 31 2011.
To this end, the decision makers of the ABSSB need to take definitive and immediate actions to ensure the future sustainability of the fund for the betterment of the people of Antigua & Barbuda.
For additional information on Social Security issues, please contact the Social Security Office at:
Know Your Social Security
Antigua & Barbuda Social Security Board
PO Box 1125
St John’s, Antigua.