– says portability of social security schemes need to be looked at in the Caribbean

THE protection and well-being of workers and elders are often the primary focus of government and labour organisations, but the efficiency of services offered, especially in the Caribbean, could be improved if existing social security systems are reformed.

Although when compared globally, the Caribbean has well-developed social security structures, the viability of the existing social security schemes needs to be examined, said the International Labour Organisation (ILO)’s Director for Decent Work in the Caribbean, Claudia Coenjaerts, during an exclusive interview with the Guyana Chronicle.

“It depends on who is covered and how is the coverage…for instance, the public and private sectors utilise social security systems, but persons in the informal economy are often not covered,” said Coenjaerts. She added that the Caribbean needs to assess whether the benefits are adequate and improve the existing schemes.

The director advised the Caribbean to look closely at the schemes, because they are not adequate and do not cover all workers.

A social security system is defined as a federally funded service and payment to help support the needy, the aged, and the temporarily unemployed, as well as providing support for needy, dependent, disabled, or neglected children, rehabilitation for the disabled, and a host of other social services.

Coenjaerts said all actuarial studies have found that social services need to be reformed and should address issues such as moving the pension age higher because, the money being generated by economies across the Region would not allow future generations to benefit from those services.

Studies have proven that in some countries the elderly population continues to grow, while the working population remains stable.
In addition, Coenjaerts said, while the Caribbean has done well on freedom of movement, the Region has not as well on freedom of services.

“That is something we need to look at if we want the region to develop further…we need to use each other, especially in the area of work…There should be portability of social security schemes,” she said, adding that portable schemes would allow persons to access social services in whichever Caribbean country they travel to.

This issue was raised by the ILO at the level of CAICOM but, making schemes portable continue to be difficult because all the schemes have their own bases.
The ILO has however been working and engaging social security institutions and would continue to do more and provide technical assistance if approached by Governments and institutions, said Director Coenjaerts.

Evident of local challenges with social security systems was a report that the National Insurance Scheme (NIS) recorded a loss of $414 million at the end of June 2018.
The NIS was nearing a crisis stage. In 2011, the fund experienced its first deficit of $371 million and was expected to incur a larger deficit in 2012.
With assets of just over two times annual expenditure, the entire fund will be exhausted in less than 10 years if contribution rate increases and benefit reforms are not made immediately.

Finance Controller of NIS, Jacquelyn Scotland, said that on June 30, the funds stood at $31.1 billion but the company had still recorded a loss of $414 million.
Over the years, the NIS has been facing challenges because of the imbalance between the collections and payments.

The Scheme believes that it could still avoid the bleak outlook that was presented in the eighth actuarial report of the National Insurance Fund in 2011.