1. Pensions and Benefits Date : March 2015

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5. The principles of social security  To address poverty (individual and family)  To be simple and transparent  To encourage people to work (where they can)

6. Why do a review?  Pensions and benefits in the Isle of Man are complicated, expensive to run and will not be affordable in the future  We need a simple, fair and sustainable system  This is not new……

7. Demographic Changes – the “ageing population” Pensions Act 2007 - Reform of State Pensions in UK to be applied in IOM Need to review Pension Supplement Scheme to ensure sustainability in long term Financing of nursing care in nursing homes Financing of long-term care Review of existing benefits programme Social Security - Main issues for consideration

8. A complicated system  The state retirement pension is made up of six parts  It is very difficult to understand  The benefits system has 21 parts - all with their own rules!  The system was designed for the UK not the Isle of Man

9. Affordability  State pensions and most benefits are paid out of National Insurance Contributions, and annual benefits are now costing more than we receive in contributions  We have a lot of contributions saved in a fund, but this will run out if we don’t make changes

10. Your views? Comments or questions?

11. The Ci65 review  Started in 2013  Final report received in September 2014

12. Ci65’s forecast  INSERT CI65 GRAPH SHOWNING POSSIBLE FUTURE

13. Previous forecasts tell a story

14. What did Ci65 say?  Only changes to pensions or national insurance contributions will make a real difference to the future of the National Insurance fund  The current system is not affordable in the long- term  Minor changes will not be enough – “only bold transformation will do”

15. Question 1 0 1 - Strongly Agree 2 - Agree 3 - Neutral 4 - Disagree 5 - Strongly Disagree Do you agree that action is needed?

16. Question 1 - Results 1 - Strongly Agree 2 - Agree 3 - Neutral 4 - Disagree 5 - Strongly Disagree 0% Do you agree that action is needed?

17. A new Manx pension  Flat rate pension of around £180 per week  Build-up over 45 years  Minimum of 10 qualifying years before any pension rights  Pension increased each year in line with average earnings  Later retirement age  You have some choice about when to draw your pension

18. Protection  Existing pensioners will be largely unaffected  The pension supplement will be gradually removed over a 20 year period

19. Your views?  Is a flat rate pension a good idea?  Should the build-up period match people’s actual working lives?  Should you have a minimum number of qualifying years before getting a pension at all?  Should the state retirement age go up?

20. Your views?  Should you have some choice about when you take your pension?  Should we protect existing pensioners from any changes?  Should the Manx pension supplement be gradually removed?

21. Question 2 0 1 - Strongly Agree 2 - Agree 3 - Neutral 4 - Disagree 5 - Strongly Disagree Do you think that the Idea of a Manx Retirement Pension is a good idea?

22. Question 2- Results 1 - Strongly Agree 2 - Agree 3 - Neutral 4 - Disagree 5 - Strongly Disagree 0% Do you think that the idea of a Manx retirement pension is a good idea?

23. National Insurance With a new Manx pension –  Contributions need to match the cost of benefits  Changes must be –competitive for our economy –simple and fair for everyone

24. Ci65 suggested  Trying to make contributions from self-employed and employed people the same  Thinking about whether people who contribute should get a better deal  Making the system encourage employment  Making the system simpler

25. Your views?  Should we keep a National Insurance system?  Should employed and self-employed people pay the same to get the same benefits?  Should actually paying National Insurance contributions give you a better deal from the system than people who don’t?  Would a simpler system be better?

26. Question 3 0 1 - Strongly Agree 2 - Agree 3 - Neutral 4 - Disagree 5 - Strongly Disagree Are some changes to the National Insurance System needed if we keep it?

27. Question 3 - Results 1 - Strongly Agree 2 - Agree 3 - Neutral 4 - Disagree 5 - Strongly Disagree Are some changes to the National Insurance System needed if we keep it? 0%

28. Saving for retirement  The state pension may only meet part of our financial needs in later life  Workplace and personal pensions already address this  What about those without workplace or personal pensions?  UK now has compulsory workplace pensions and Ci65 recommended that the Isle of Man should think about something similar

29. Ci65 recommendations  Everyone earning over £9,500 would be in a workplace pension scheme unless there is one already  The new retirement saving scheme would be set up by the Government  Employees would contribute 6% and employers 4% on earnings up to £60,000 per year

30. Question 4 0 1 - Strongly Agree 2 - Agree 3 - Neutral 4 - Disagree 5 - Strongly Disagree Would some form of compulsory savings scheme for retirement be a good idea?

31. Question 4 - Results 1 - Strongly Agree 2 - Agree 3 - Neutral 4 - Disagree 5 - Strongly Disagree Would some form of compulsory savings scheme for retirement be a good idea? 0%

32. Working age benefits  16 of our 21 benefits are for working age people - all with their own rules  Ci-65 recommended that we simplify our benefits system and make it responsive to the needs of the Isle of Man  They proposed a ‘new Manx benefit’

33. New Manx benefit  Manx benefit - a means-tested basic amount, based on who lives in a household  Additions to cover specific needs whether permanent (disability) or temporary (sickness, maternity)

34. New Manx benefit  A simpler, faster, more transparent system  No need to submit new claims when you move from one benefit to another  Cheaper to administer  Supports people in need but encourages them to move “up and out” of benefits  A guarantee that people will be better off in work than on benefits  It might include a benefit cap

35. Your views?  Should we have a benefits system which suits the Isle of Man and control when we want to change it?  Should the system overall encourage people to be in work?  Should we introduce a benefit cap?

36. Question 5 0 1 - Strongly Agree 2 - Agree 3 - Neutral 4 - Disagree 5 - Strongly Disagree Do you think that the New Manx Benefit sounds like a good idea?

37. Question 5 - Results 1 - Strongly Agree 2 - Agree 3 - Neutral 4 - Disagree 5 - Strongly Disagree Do you think that the New Manx Benefit sounds like a good idea? 0%

38. Questions