1. Eastern Caribbean Central Bank
Social Security Systems in CARICOM:
Some Imperatives for Sustainability
29th Meeting of the CARICOM Heads of Social Security
6 – 8 June 2018
St Kitts Marriott Resort
6/20/2018
Transforming The ECCU Together

2. Eastern Caribbean Central Bank
Roadmap
Key Messages
The Criticality of Social Security and the Link with Governments’ Fiscal Situation
Global Trends and Regional Challenges Impacting Sustainability
The Way Forward: Some Recommendations
6/20/2018
Transforming The ECCU Together

3. fiscal resilience frameworks The adoption of is by governments help
Eastern Caribbean Central Bank
Key Messages
The adoption of
fiscal resilience
frameworks is
by governments help
critical to
safeguard the
of Social
Security
sustainability Systems.
6/20/2018
Transforming The ECCU Together

4. sense of urgency Key Messages Governments and Social Security Boards
Eastern Caribbean Central Bank
Key Messages
Governments
and Social
Security Boards
ought to
adopt a
sense of urgency
about implementation of key reforms.
6/20/2018
Transforming The ECCU Together

5. Collective action, as a region, is essential to manage risks and seize
Eastern Caribbean Central Bank
Key Messages
Collective
action, as a
region, is essential to
Caribbean Community
manage risks and seize
opportunities that confront Social Security Systems.
6/20/2018
Transforming The ECCU Together

6. Eastern Caribbean Central Bank
Social Security: Stylised Facts
Size of sector is significant
Major source of regional savings and liquidity for commercial banks
Major Investors on the Regional Government Securities Market (RGSM)
Finances social and economic development
ECCU Indicators %
Reserves to GDP (as at 2015)
33.3
Deposits to GDP (as at 2017)
9.5
RGSM Participation
(value of Bids % GDP)
9.3
Source: ECCB Statistics Department
6/20/2018
Transforming The ECCU Together

7. Eastern Caribbean Central Bank
Social Security: Stylised Facts
CARICOM Indicators %
Reserves to GDP (as at 2014)
24.0
Pension Benefits:
Replacement Rates (as at 2014)
Eligibility:
60 – 70 years (Average 63)
Source: 2016 IMF Working Paper
Size of sector is significant
Relatively high replacement rates
Rising retirement age
6/20/2018
Transforming The ECCU Together

8. Eastern Caribbean Central Bank
Key Global Challenges and Responses (ISSA)
Use of bilateral/multilateral social security
Coverage is improving globally but there is room for improvement
agreements.
C H A
L L
E N
G E S
R E S P
O  Increases in retirement age and use of benefit
N programmes to support efforts to increase
S birth rates E
Use of both tax-financed and contributory
mechanisms to extend coverage
Ageing Population
High Levels of Unemployment and Underemployment, especially among youths S
Unemployment protection programme using
social security and tax-financed income support
6/20/2018
Transforming The ECCU Together

9. Eastern Caribbean Central Bank
Key Global Challenges and Responses (ISSA)
Extend legal coverage to new categories of workers
Use new technologies to improve delivery of services
C Transitioning to the H Digital Economy and A Changing Labour L Markets
L E N G E S
R E S P O N
S 
E S
Demand new innovative and response solutions
fast- risk
New Risks and Shocks from Extreme Events
focusing on business
management and planning
continuity
6/20/2018
Transforming The ECCU Together

10. Eastern Caribbean Central Bank
Be Warned
“If the rate of change outside is faster than the rate of change inside, the end is in sight”.
~ Jack Welch
6/20/2018
Transforming The ECCU Together

11. Key Recommendations (Parametric)
Eastern Caribbean Central Bank
Key Recommendations (Parametric)
Raise the statutory retirement age in line with life expectancy (typically 65)
Increase contribution rates (via gradual automatic adjustments)
Broaden coverage through compliance and incentives regimes (especially for the self-employed)
Introduce a modest unemployment benefit (with an appropriate contribution rate)
6/20/2018
Transforming The ECCU Together

12. Key Recommendations (General)
Eastern Caribbean Central Bank
Key Recommendations (General)
Governments ought to adopt fiscal resilience frameworks via legislation.
Each country ought to publish a timeline for implementing parametric reforms (with automatic adjustments) to ensure solvency of the Systems.
Improve timeliness of disclosure of financial statements and actuarial reports to Parliament and the public.
6/20/2018
Transforming The ECCU Together

13. Key Recommendations (General)
Eastern Caribbean Central Bank
Key Recommendations (General)
Pursue more functional cooperation among Social Security Systems in areas such as
corporate governance, research and development and investment.
6/20/2018
Transforming The ECCU Together

14. Eastern Caribbean Central Bank
Something to Ponder
“if we don’t change direction, we are likely to end up where we are headed”.
~ Chinese Proverb
6/20/2018
Transforming The ECCU Together

15. Fiscal Resilience Framework Sense of Urgency Collective Action Now
Eastern Caribbean Central Bank
Final Word
Fiscal Resilience Framework
Sense of Urgency
Collective Action
Now
6/20/2018
Transforming The ECCU Together

16. Eastern Caribbean Central Bank
Thank You
Eastern Caribbean Central Bank P O Box 89, Basseterre, St Kitts
Tel. No: (869) Fax No. (869)
Website:
6/20/2018
Transforming The ECCU Together