Your Pension May Be At Risk!!
By Ryan Haas
Reporter-SKNVibes.com
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Elvin Bailey - Assistant Director of Research, Statistics and Public Relations for Social Security
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BASSETERRE, ST KITTS - MOST workers believe that by paying Social Security benefits out of their weekly paychecks they are guaranteed to receive an adequate pension upon their retirement; however, the Social Security Reform Committee believes that a number of factors could make this a dangerous assumption.
In speaking with SKNVibes, Elvin Bailey, Assistant Director of Research, Statistics and Public Relations for Social Security, stated that the paramount risk to a person’s pension comes from employers who are non-compliant in paying their share to the Social Security Fund. “Social Security has about EC$2 million out there, in arrears, to collect and every bit counts. It means that that much money is not being made available for people’s pensions or sickness benefits,” he said.
Aside from non-compliance, the rapidly rising cost of living around the world is another factor that can affect a person’s pension because of the way the amount of payment is computed. “Currently a person can begin collecting Social Security at the age of 62 if they have at least 500 weeks of contribution.
“The amount of monthly payment that a person subsequently receives is equal to 30% of their best annual salary over the past fifteen years, or up to 60% if a person has paid more than the minimum 500 weeks,” said Bailey. ~~Adz:Right~~
Bailey explained that the problem some benefactors are facing is that their individual percentage of wages ten years ago may not prove to be a suitable amount in the face of substantially rising food costs and oil prices. “In the past we have adjusted the Social Security benefits for cost of living and inflation ad hoc, that is, when we saw the specific need to do so. However, the Reform Committee is now talking about putting a list of benchmark factors in place so people will not be shortchanged while waiting for their benefits to catch up to modern costs.”
Internal factors have also become issues worth looking into, affirmed Bailey. “Sickness payout has been increasing every year. It has doubled since the year 2002 (EC$2,203,149) and represents one of those insidious factors eating away at the long term survivability of the Fund.
“The question therefore becomes this: if five million dollars is being paid out now, what impact will this type and increasing size of payment have on the ability of Social Security to pay pensions in the future?” the Assistant Director stated earlier this year.
While a National Health Insurance plan and penalizing the pensions of those who draw sickness benefits have been taken under consideration by the Reform Committee as a possible solution, Bailey stated that he hopes the community will continue to voice their opinions on these and other matters to help make the Social Security Fund a reliable and sustainable program for the future.
