SSB Seeks Public Input on Seven Proposed Social Security Reforms

The Social Security Board is seeking public feedback on seven proposed reforms intended to strengthen Belize’s social security system and protect its long-term financial sustainability. The second round of consultations continued yesterday with a session in Belize City, following the first round earlier this year, which included nineteen consultations nationwide and more than one thousand participants. SSB Chief Executive Officer Jerome Palmer says reform is becoming increasingly urgent as the cost of providing benefits continues to rise.

Jerome Palma, Chief Executive Officer, Social Security Board:  “Benefit costs are growing faster than contributions. IE, we’re paying a lot more pension benefits in particular. Total expenditure is projected to exceed total income in 2035, meaning that’s our period of equilibrium. Our total costs will exceed what we’re getting in revenues and income.” 

The Board projects that total expenditure could exceed total income by 2035. The seven proposed reforms fall under four main areas: the contribution model, determining pension benefits, pension adjustments, and automatic triggers and provisions. Under the contribution model, SSB is proposing to replace wage bands with a percentage-based system tied to actual earnings, increase the contribution floor from fifty-five dollars to one hundred and thirty dollars, raise the insurable earnings ceiling from five hundred and twenty dollars to eight hundred dollars per week, and revise how contributions are divided between employees and employers. The ceiling increase would be phased in, reaching six hundred dollars in 2028, seven hundred in 2029, and eight hundred in 2030.

Jerome Palma, Chief Executive Officer, Social Security Board: “On the actuarial  recommendation, the proposal then is to move from 520 up to a ceiling of 800 to phase it in. So the proposal is not a jump from 520 to go to 800 in one year. We want to phase it in over a few years. The impact obviously will be better benefits. When we look at some of the examples you may see that it will be better benefits. It will mean higher contributions. If you’re moving the ceiling from 520, you’re contributing at 520 and you’re taking it to 800 you’ll contribute at 800. So that means that it will be an increase in terms of the contribution.” 

The proposed model would maintain the overall contribution rate at ten percent but change the employee-employer split according to weekly earnings. Below three hundred and forty dollars, employees would pay three percent and employers seven percent. At three hundred and forty dollars and above, employees would pay four-point-five percent and employers five-point-five percent. SSB says the changes could improve benefits, although some contributors may pay more.

Jerome Palma, Chief Executive Officer, Social Security Board: “Split now 10% still we’re not making any changes to that 10% the 10% remains. Split according to below 340 a 3% employee 7% employer. 340 and above 4.5% employee 5.5% employer That’s the proposal that we now have.”

The remaining reform areas focus on how pension benefits are calculated, how pension payments are adjusted over time, and the introduction of automatic triggers and provisions to help the system respond to changing economic conditions. Together, the proposals are intended to balance adequate benefits with the fund’s ability to meet its obligations in the years ahead. The Belize City session was part of a second round of consultations scheduled to continue in other communities through November. The Board is inviting workers, employers, pensioners and other stakeholders to share their views as it explores changes to the social security system.