Acting Director's Social Security Week 2022 Radio Address
Good day. It is my pleasure to address you as Director (Ag) on the occasion of Social Security Week 2022, and today, in particular, November 3rd, 2022, which marks 42 years since the passage of the Social Security Act.
Each year, the Social Security Board celebrates Social Security Week, in the week during which November 3rd falls. This is to commemorate the anniversary of the passage into law of the Social Security Act on November 3rd, 1980. The Social Security System, which has its foundation in the Act, was introduced to Anguilla by the late Honourable Father of the Nation, Mr James Ronald Webster. Today, we can indeed say that it has impacted the lives of contributors and their families and the people of Anguilla in general. We pause at this time to acknowledge the contribution of Mr Webster, the then Government of Anguilla, and all those who supported him in its introduction.
The Social Security System exists to provide universal coverage and protection for workers and their families when wages are disrupted by certain contingencies, such as sickness, maternity, disability, old age, and death. Social Security has as its Mission to contribute to the transformation of the quality of life in Anguilla through meaningful social security, community empowerment, and national impact initiatives. Its Vision is to assist in the transformation of Anguilla into a smart, resilient, diversified, healthy, green, and inclusive country with universal social security coverage and full employment enabled by a customer-centric and technology-driven Social Security System. All this is to be achieved by a cadre of employees who have as their core values - Accountability, Customer-focused, Teamwork, Integrity, Visionary -Leadership, and Excellence: ACTIVE.
In recent times, the Social Security Board has experienced economic shocks, which have negatively impacted its operations. Beginning with the Global Financial crisis in 2008, Hurricane Irma in 2017 and the COVID-19 pandemic in 2020, of which we are still experiencing its effects, current global events such as the war in Eastern Europe, high inflation and rising interest rates, which negatively impact the stock market where the Social Security Board holds some of its investments. The high levels of unemployment due to Hurricane Irma and the COVID-19 Pandemic necessitated the payment of Unemployment benefits to ease some of the financial hardships of the unemployed and underemployed. The payment of this new unemployment/underemployment benefit resulted in benefit expenditure being at an all-time high. At the same time, the System was faced with lower contribution levels due to the high level of unemployment. Higher benefit expenditure and lower contribution income negatively impacted the Fund. Yet, the payment of the temporary Unemployment/Underemployment benefit in 2017/2018 and again in 2020/2021 demonstrated the responsiveness of the Social Security System to the needs of its contributors. The System was able to provide a benefit not included in the original package of Benefits as set out in the Social Security Act, and by all means, an unfunded benefit. We can all agree that having a funded permanent unemployment benefit in place is necessary to ensure that the Fund can adequately aid contributors when they become unemployed or underemployed. As part of its governance mandate, the Board, while introducing new benefits, must ensure that the Fund is not negatively impacted, threatening its sustainability.
Innovation and Transformation - To be more customer focused and responsive to changing needs, the Board continues to strive to be the leader in innovation in Anguilla, transform its services to the people of Anguilla, and improve its efficiencies. A contract for the Multi-Benefit Solution, the Social Security Board's new social insurance administration system, was signed with Bearing Point Caribbean in April 2019. April 11th, 2022, the pandemic's height, saw the launch of the first phased rollout with Contributions filing, electronic upload of payroll listings, and Employer & Self-Employed Registrations.
The Multi-Benefit Solution provides users with many efficiencies, such as
- A modern self-service customer portal that offers quick and easy completion of Social Security business.
- 24-hour availability, providing around-the-clock service to meet customer expectations.
- Filing or payment reminders via email and in the online portal ensuring the avoidance of penalties.
- Electronic payment via bank transfer.
- And making monthly contributions faster and easier with an online payment reference.
The second phase of the Multi-Benefit Solution system is expected to be rolled out towards the end of 2022 and the first quarter of 2023. This phase will include a facility to enable claimants to file their Sickness and Maternity benefit claims online and also to check on the status of their claims. Other phases will include a facility for paying pensions and filing these claims.
In addition, a Compliance sub-system and a Miscellaneous Receipts facility will come on stream shortly.
The primary purpose of periodic actuarial reviews is to determine if the social security system operates on sound financial and actuarial bases and if it provides adequate and affordable levels of income protection. Where necessary, recommendations are made to ensure that these objectives can be achieved for current and future generations.
One of the critical recommendations coming out of the Actuarial Report expected to come in place as of January 1, 2023, is an increase in the Contribution rate from 10% to 12% in increments of .5%, i.e., an increase of .25% Employer and .25% Employee, each year for four years. Public consultations and information sessions will commence shortly to ensure that the public is aware of this and other actuarial recommendations.
While many significant events have negatively impacted the Social Security System, the Social Security Fund Assets are expected to exceed $434 million by the end of 2023 (before accounting for impairments and depreciation). The Social Security Board will take the necessary measures to ensure that the System remains financially sustainable to continue to provide the social protection it was created to deliver.
In closing, I pray that God will continue to bless the people of Anguilla and the Anguilla Social Security System as it continues to strive to fulfil its mandate and Mission.
I take this opportunity to thank everyone who has participated in the Social Security Week 2022 activities thus far, particularly the wonderful church service that commenced the Week on Sunday. I wish for everyone to continue to enjoy the remaining activities, and I invite you to the Health Walk and Breakfast starting from the Social Security Parking Lot on Saturday at 5:00 a.m. to close the Week.