During a quarterly public hearing, Senator Sarah Ferguson questioned Deputy Susie Pinel and her team over the
net level of contributions Islanders are paying into Social Security funds, which provide welfare for Islanders including income support, sick pay and state pensions.
‘The elephant in the room is [that] the rate at which money is being taken out of Social Security funds appears to be much higher than it is being put in,’ Senator Ferguson said.
‘More than 50 per cent of the population are net withdrawers from funds rather than contributors. There’s obviously more going out of funds than is going in.’
Sue Duhamel, a policy director in the Social Security Department, said that this had ‘always been the case’ but it was compensated for because the States partially funded Social Security.
But Senator Ferguson pointed out that the money provided from the States was cut by £20 million to £65 million in the last Medium Term Financial Plan, which was for the period 2016 to 2019.
In response, Mrs Duhamel said that the full contribution level of £85 million would be reinstated in the next MTFP, unless States Members vote to cut it again.
During the Health and Social Services Scrutiny panel hearing, the minister was also asked for an update on her plans to encourage employers to introduce compulsory workplace pension schemes.
The minister has said previously that she would like all employers to provide compulsory schemes so that Islanders are encouraged to become more reliant on private,
rather than States-provided, pensions.
‘It’s about encouraging people to start saving up earlier for their retirement and trying to get a change of culture,’ said Deputy Pinel.
Senator Ferguson pointed out, however, that private pension schemes were more vulnerable to collapse than state-provided equivalents.
‘What are you doing to ensure that workplace pension schemes don’t get scrapped if the company goes bust?’ she said.
‘I think there have been a number of cases in the UK. What are you doing in case one or two main companies go out of business and the pension scheme goes with it?’
Senator Ferguson suggested that the department engage with insurance companies for protection in case this happens in Jersey.
Social Security chief officer Ian Burns said that the department was discussing relevant issues with stakeholders as part of its review of the matter.
