The Government Actuary’s Department (GAD) has completed actuarial reviews for 2 of Guernsey’s social security funds. These are the Guernsey Insurance Fund and the Long-term Care Insurance Fund.
Social security is a long-term undertaking because benefits for current contributors may still be being paid in 60 or more years’ time. It is therefore important that policymakers and the wider public have a clear understanding of the financial commitments being made.
GAD looked at the period up to the year 2080. The reports show the contribution rates required to finance the benefits, allowing for the policy on the balance that should be held in the funds.
They also illustrate some of the key drivers of the funds’ finances. These include how benefits are increased each year, migration patterns and earnings growth.
GAD Actuary James Thompson led the project. He said: “Decisions on the financing of social security commitments can be complex. These reviews are important in helping policymakers assess the long-term viability of the funds for the people of Guernsey.”
The Committee for Employment & Social Security has considered the reports which will be presented to the States of Deliberation, the legislature and government of Guernsey, later this month (February 2021).
The results provide a sound basis on which to build future decisions on benefit rates and contribution levels.