{"id":509,"date":"2020-07-30T15:05:34","date_gmt":"2020-07-30T15:05:34","guid":{"rendered":"http:\/\/audit.gov.ms\/?p=509"},"modified":"2020-07-30T15:05:34","modified_gmt":"2020-07-30T15:05:34","slug":"montserrat-social-security-fund","status":"publish","type":"post","link":"http:\/\/audit.gov.ms\/?p=509","title":{"rendered":"Montserrat Social Security Fund"},"content":{"rendered":"\n<p>The Office of the Auditor General is pleased to\nannounce that its report entitled <strong>The <\/strong><strong>Montserrat\nSocial Security Fund<\/strong><strong>: Governance\n&amp; Sustainability<\/strong> was presented to\nthe Legislative Assembly on July 28, 2020.&nbsp;\n<\/p>\n\n\n\n<p><strong>Background: <\/strong>The MSSF was enacted in 1985 and began operations in July, 1986.&nbsp; The Fund receives contributions from employees,\nemployers, and self-employed persons. It provides [1] short-term benefits\n(e.g., paid sickness leave; paid maternity leave) and [2] long-term benefits &#8211; principally\npensions (96% of benefits being paid) to over 1,000 persons.&nbsp;&nbsp; <\/p>\n\n\n\n<p><strong>Key\nFindings:<\/strong><\/p>\n\n\n\n<ul><li>There\nis adequate oversight of strategic planning, budgeting, operational processes,\nand spending. Internal financial controls are strong. However, there is\nexcessive use of paper, and too little use of all the available digital\ntechnologies for information, communication, services, &amp; payments,\nincluding the MSSF\u2019s website. <\/li><li>Contribution rates and the ceiling for insurable\nearnings are too low<strong><em>. <\/em>&nbsp;&nbsp;<\/strong>They have not been raised for several years, and are below\nthe cost of the benefits that are being paid whilst the cost of pensions is\nrising each year.<\/li><li>The\n2018 Census showed a further decline in the population, despite a 25% increase\nin immigration since year 2011. Falling and aging population directly leads to\n(a) reduced contributions to MSSF\u2019s revenues, and (b) sharp increases in\nspending on benefits and especially on pensions. <\/li><li>We\nfound that poor diversification and losses from impairments have combined to\nproduce increasingly poor performance of the portfolio of investments. During\n2011 to 2018 the already low yield fell by half from 3.70% per annum to 1.90%\nper annum. &nbsp;&nbsp;<\/li><li>The\nFund has had a large deficit every year for the past decade. &nbsp;&nbsp;In recent years, it more than tripled: from\n$1.42 million (2015) to $4.63 million (2017).&nbsp;\n&nbsp;In turn, the reserves are falling\nrapidly and at a rising rate. &nbsp;&nbsp;Without\nimmediate corrective action to boost contributions to the Fund, all reserves\nwill be gone within as little as 3 to 4 years. <\/li><\/ul>\n\n\n\n<p>Key Recommendations:<\/p>\n\n\n\n<ul><li>Increase contribution-rates and the ceiling for\ninsurable earnings in line with cost of benefits<em>. <\/em><\/li><li>Gradually raise the qualifying age for full pension\nin line with high and rising life-expectancy. <\/li><li>Abolish, suspend, or reduce early pensions, except\nin cases of hardship, to reduce losses. <\/li><li>Rebuild &amp; diversify the reserves to support the\ncontinued payment of benefits to pensioners. <\/li><\/ul>\n\n\n\n<p><strong>In response to this Audit\nReport (on page 23) an excerpt from the Acting Director\u2019s response is as\nfollows:<\/strong><\/p>\n\n\n\n<p>I have reviewed your initial findings\nand I am in agreement with them. We, along with our Actuary, have been in\ndiscussions with the Honourable Financial Secretary and the new Premier about\nthe current situation and these discussions will be ongoing until we arrive at\na suitable solution to these problems. <\/p>\n\n\n\n<p>Every effort has been made over\nthe years to diversify the investment portfolio and increase investment\nreturns, while attempting to maintain the balance between risk and return. <\/p>\n\n\n\n<p>The full audit report highlights several other findings\nand recommendations.&nbsp; Their\nimplementation will bring significant improvements in the funding of the MSSF\nto save it for present and future pensioners. <\/p>\n\n\n\n<p><strong>The report in its entirety can be found at the Montserrat Public Library\nor by visiting&nbsp;<a href=\"http:\/\/audit.gov.ms\/publications\/\">Publications<\/a>&nbsp;or by requesting an\nelectronic copy from the Office of the Auditor General<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Office of the Auditor General is pleased to announce that its report entitled The Montserrat Social Security Fund: Governance &amp; Sustainability was presented to the Legislative Assembly on July 28, 2020.&nbsp; Background: The MSSF was enacted in 1985 and began operations in July, 1986.&nbsp; The Fund receives contributions from employees, employers, and self-employed persons. [&hellip;]<\/p>\n","protected":false},"author":1001003,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"http:\/\/audit.gov.ms\/index.php?rest_route=\/wp\/v2\/posts\/509"}],"collection":[{"href":"http:\/\/audit.gov.ms\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/audit.gov.ms\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/audit.gov.ms\/index.php?rest_route=\/wp\/v2\/users\/1001003"}],"replies":[{"embeddable":true,"href":"http:\/\/audit.gov.ms\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=509"}],"version-history":[{"count":0,"href":"http:\/\/audit.gov.ms\/index.php?rest_route=\/wp\/v2\/posts\/509\/revisions"}],"wp:attachment":[{"href":"http:\/\/audit.gov.ms\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=509"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/audit.gov.ms\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=509"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/audit.gov.ms\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=509"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}