ILO to conduct Actuarial Review of Belize’s Social Security Scheme and the cost assessment for the unemployment insurance
The review will also consider the avenues to enhance the SSB’s investment portfolio allocation strategy, governance and operative structures, to ensure alignment with the Scheme’s retirement benefit liability profile as well as to maximize risk-weighted investment returns.
22 August 2022
© Social Security Board of Belize
The ILO has been providing actuarial services to national social security systems in its member states since the 1940s. ILO actuarial services are uniquely positioned as they are anchored in international labour standards and respect tripartite consultation principles. Following a request from the Government of Belize, the Social Security Board (SSB) engaged the ILO to conduct an actuarial valuation of its national Social Security Scheme. The valuation is primarily aimed at assisting the SSB in ensuring that the social security system operates on sound financial and actuarial basis, as well as to provide adequate and affordable levels of income protection for its membership.
The review will also consider the avenues to enhance the SSB’s investment portfolio allocation strategy, governance and operative structures, to ensure alignment with the Scheme’s retirement benefit liability profile as well as to maximize risk-weighted investment returns.
The Actuarial Review exercise will:
“The Social Security Board of Belize’s responsiveness to the evolving social insurance needs of its current and future members and beneficiaries, accelerated during these times of pandemic and global challenges, required much flexibility and collaboration with diverse social security experts to improve its resilience, dynamism, financial sustainability, benefits, and service delivery. The actuarial valuation and the cost assessment for the unemployment insurance are two highly important opportunities that SSB fully embraces to drive the urgently needed social security reforms,” said Leticia Vega, General Manager, Policy, Research and Actuarial Services, Social Security Board, Belize.
She further stated, “With the possibility of the introduction of an unemployment insurance, Belize is expected to have a robust and sustainable social protection response to the unemployed, especially when unemployment levels peak suddenly during pandemics or economic shocks. Meanwhile, the 2021 actuarial valuation, which is part of SSB’s mandate and strategic plan, will consider an in-depth analysis of the retirement benefits branch and the short-term branch with the inclusion of recommendations of appropriate parametric changes. SSB enthusiastically awaits the successful implementation of these two key projects and is very grateful to the ILO and all stakeholders contributing to its fruition.”
The ILO has recently conducted multiple actuarial assessments of the Caribbean social security schemes including for Guyana, Dominica, Saint Lucia, The Bahamas and Trinidad and Tobago. This experience will be utilized to adapt the ILO/PENSIONS model to the Caribbean context, with further customization to the unique national context of Belize, and specifically to the Social Security Board.
The COVID-19 pandemic highlighted the need to count on adequate social protection in case of unemployment. Currently, the social security system of Belize does not have the unemployment insurance (UI). Under the framework of the SDG Fund Joint Programme - “Building a resilient Belize through universal, adaptive, and sustainable social protection” - and in coordination with the actuarial review, the ILO will provide support to the SSB to conduct a cost assessment (CA) for the implementation of the UI in Belize.
The CA will provide crucial information to extend the social security coverage for the unemployed. The CA will be conducted in accordance with the ILO social security Conventions and Recommendations.
1 Some SSB officials who have already progressed with foundation training on ILO and ISSA Guidelines, will be nominated for participation to the actuarial valuation exercise.
The review will also consider the avenues to enhance the SSB’s investment portfolio allocation strategy, governance and operative structures, to ensure alignment with the Scheme’s retirement benefit liability profile as well as to maximize risk-weighted investment returns.
The Actuarial Review exercise will:
- Engage with SSB statistical team to develop the internal actuarial costing capacity through a hands-on application of the new online ILO/PENSION model to generate costing outcomes;
- Undertake stress-testing exercises to elucidate external and internal factors which pose risks to benefit adequacy and funding sustainability;
- Evaluate whether or not the SSB is operating on a sound financial basis by evaluating the current funding position and projecting the Fund’s financial sustainability over a 50-year period;
- Review the Scheme's legal provisions and the proposed reform options and conduct a compliance analysis with the internationally recognized ILO Convention No. 102 on social security minimum standards;
- Consider the feasibility and application of automatic adjustment mechanisms, and how these can be progressed with reference to the Social Security Act.
“The Social Security Board of Belize’s responsiveness to the evolving social insurance needs of its current and future members and beneficiaries, accelerated during these times of pandemic and global challenges, required much flexibility and collaboration with diverse social security experts to improve its resilience, dynamism, financial sustainability, benefits, and service delivery. The actuarial valuation and the cost assessment for the unemployment insurance are two highly important opportunities that SSB fully embraces to drive the urgently needed social security reforms,” said Leticia Vega, General Manager, Policy, Research and Actuarial Services, Social Security Board, Belize.
She further stated, “With the possibility of the introduction of an unemployment insurance, Belize is expected to have a robust and sustainable social protection response to the unemployed, especially when unemployment levels peak suddenly during pandemics or economic shocks. Meanwhile, the 2021 actuarial valuation, which is part of SSB’s mandate and strategic plan, will consider an in-depth analysis of the retirement benefits branch and the short-term branch with the inclusion of recommendations of appropriate parametric changes. SSB enthusiastically awaits the successful implementation of these two key projects and is very grateful to the ILO and all stakeholders contributing to its fruition.”
The ILO has recently conducted multiple actuarial assessments of the Caribbean social security schemes including for Guyana, Dominica, Saint Lucia, The Bahamas and Trinidad and Tobago. This experience will be utilized to adapt the ILO/PENSIONS model to the Caribbean context, with further customization to the unique national context of Belize, and specifically to the Social Security Board.
The COVID-19 pandemic highlighted the need to count on adequate social protection in case of unemployment. Currently, the social security system of Belize does not have the unemployment insurance (UI). Under the framework of the SDG Fund Joint Programme - “Building a resilient Belize through universal, adaptive, and sustainable social protection” - and in coordination with the actuarial review, the ILO will provide support to the SSB to conduct a cost assessment (CA) for the implementation of the UI in Belize.
The CA will provide crucial information to extend the social security coverage for the unemployed. The CA will be conducted in accordance with the ILO social security Conventions and Recommendations.
1 Some SSB officials who have already progressed with foundation training on ILO and ISSA Guidelines, will be nominated for participation to the actuarial valuation exercise.