Key Takeaways
- • Jersey's Social Security Reserve Fund has been drawn down since 2020 as the government reduced its contributions to the Jersey Social Security Fund, according to the BBC report, and the government intends to continue this in the 2027 budget.
- • Alisdair Macleod, an accountant and former civil servant, says the policy "concerns him a lot" and cites the 2021 actuarial assessment projecting the fund would run out entirely by 2082 under current migration levels.
- • Macleod says a subsequent projection including a government contribution cut reduced the fund's life by a further 10 years, per the figures he cites.
- • Jersey's Fiscal Policy panel warned that drawdowns and contribution cuts should only occur after a comprehensive actuarial review, yet States Members are being asked to vote on reducing the states grant for 2027 before that review is complete.
- • Senator Millar argues the reductions are fair given the fund's size, stating the reserves could cover pensions for seven years even with no contributions.
Summary
The BBC reports concerns in Jersey over the use of the Social Security Reserve Fund to support the island's pension obligations. The reserve, built up over many decades to cushion the impact of an ageing population, has been reduced since 2020 as the government has cut the amount it pays into the Social Security Fund. According to the BBC, the government intends to continue this approach in the current budget.
Alisdair Macleod, an accountant and former civil servant, said the policy "concerns him a lot." He disputed the characterisation of the fund as "healthy" put forward by Deputy Millar, pointing to the last full actuarial assessment in 2021, which projected that on current migration levels the fund would be exhausted by 2082. Macleod added that a later update incorporating a government contribution cut from the previous year projected a further reduction of about 10 years in the fund's life.
Jersey's Fiscal Policy panel has warned that drawdowns and contribution reductions should occur only after a comprehensive actuarial review of future pension liabilities. Despite this, States Members are being asked to vote on reducing the states grant to the fund for the 2027 budget before that review has been completed.
Senator Millar defended the approach, saying it is fair given the overall size of the social security funds. He said there is "plenty of money" and that pensions can be paid for a very long time, adding that even with no contribution at all the fund could meet pension payments for seven years. He said few countries have a comparable level of funding for their pension schemes.
Alisdair Macleod, an accountant and former civil servant, said the policy "concerns him a lot." He disputed the characterisation of the fund as "healthy" put forward by Deputy Millar, pointing to the last full actuarial assessment in 2021, which projected that on current migration levels the fund would be exhausted by 2082. Macleod added that a later update incorporating a government contribution cut from the previous year projected a further reduction of about 10 years in the fund's life.
Jersey's Fiscal Policy panel has warned that drawdowns and contribution reductions should occur only after a comprehensive actuarial review of future pension liabilities. Despite this, States Members are being asked to vote on reducing the states grant to the fund for the 2027 budget before that review has been completed.
Senator Millar defended the approach, saying it is fair given the overall size of the social security funds. He said there is "plenty of money" and that pensions can be paid for a very long time, adding that even with no contribution at all the fund could meet pension payments for seven years. He said few countries have a comparable level of funding for their pension schemes.
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