Jersey's social security funds
GAD reviewed 2 social security funds for the Government of Jersey. We assessed possible levels of future expenditure and rates required to finance these funds.
(St Helier Town Square, Jersey. Credit: Shutterstock).
Jersey has published actuarial reports on 2 of its social security funds which were prepared by the Government Actuary.
The Government Actuary’s Department (GAD) presented the reviews of the Social Security Fund (SSF) and the Health Insurance Fund (HIF) to States Members in Jersey.
Scope of the reviews
The reviews of both funds assessed possible future levels of expenditure, and the contribution rates required to finance this expenditure. The Government Actuary also looked at the:
- financial condition of each Fund, considering changes in legislation and experience since the previous reviews in 2017
- adequacy or otherwise of contributions payable to the funds to support benefits payable from them
- future balance in each Fund, which is available to meet its expenditure and help smooth any potential changes in contributions
Actuary Jo Howlett led on the project and said: “We were delighted to support the Government of Jersey on the actuarial reviews of the SSF and HIF.
“The funds are important to Jersey’s healthcare and social security provision, and we were pleased to report positive results for both funds. We hope our analysis is helpful to future planning for Jersey.”
(Castle Gorey, Jersey. Credit: Unsplash).
Social Security Fund conclusions
The Government Actuary’s review of the SSF includes projections from 2021 to 2081. The report concludes the SSF remains in good health and is expected to be able to pay benefits out for several decades. The combined balance of the SSF funds on 31 December 2021 was £2.33 billion.
The review found the reduction in income to the SSF during the COVID-19 pandemic, was more than offset by strong investment performance over the period.
The projections were generally more favourable than in our last review at 31 December 2017. This was largely due to expectations of lower future pensioner life expectancy relative to the last review.
GAD also considered alternative demographic and migration patterns, and investment performance scenarios, all of which have a significant influence on the Fund’s future sustainability.
Health Insurance Fund conclusions
The HIF’s balance (as of 31 December 2021) was £100 million. This was a lower amount than we had projected in 2017, largely due to unanticipated payments made from the Fund. These were offset in part by better-than-expected investment performance.
The Government Actuary’s review projected the HIF position over 20 years and found the Fund is projected to decline over the next 2 decades. This will be largely due to expected increases in pharmaceutical costs and growing demand for healthcare associated with an ageing population.
There is an improvement since the 2017 review which is due to economic factors. The results will help inform the Government of Jersey’s review of healthcare funding.