Why are Actuarial Reviews important?
Section 22 of the National Insurance Act stipulates that an Actuarial Review be carried out every three years. (see excerpt below)
(1) The Board shall, with the assistance of an actuary approved by the Minister, review the operation of this Act not later than the end of every third year after the end of the year 1985 and in such review make a report to the Minister on the financial condition of the Fund and the adequacy or otherwise of the contributions payable under this Act to support the benefits payable thereunder, having regard to their other liabilities under this Act.
(2) The Minister shall, as soon as possible after receiving any report made in pursuance of the preceding subsection, lay a copy thereof before the House of Representatives.
In keeping with this mandate, since 1983 eleven (11) reviews have been conducted; the most recent was done by BBL World Actuaries in 2016.
The purpose of the review is to:
▪ Review the operations of the Fund
▪ Report on the adequacy of the Fund
▪ Recommend timely changes to ensure the sustainability of the Fund.
▪ Ensure that benefits provided are meeting the needs of the population.
The Key Findings of the 11th Actuarial Review are:
Two changes to the current pension system are being proposed:
Year of Increase | Normal Retirement Age (NRA) |
2020, 2021, 2022 | 60 |
2023, 2024 | 61 |
2025 - 2026 | 62 |
2027 - 2028 | 63 |
2029 - 2030 | 64 |
2031+ | 65 |
Year of Birth | Pensionable Age |
1962 and before | 60 |
1963 | 61 |
1964 | 62 |
1965 | 63 |
1966 | 64 |
1967 and after | 65 |
Salary | Employee | Employer | ||
Old Rate (4%) | New Rate (5%) | Old Rate (5%) | New Rate (6%) | |
$1,500 | $60 | $75 | $75 | $90 |
$2,000 | $80 | $100 | $100 | $120 |
$2,500 | $100 | $125 | $125 | $150 |
$3,000 | $120 | $150 | $150 | $180 |
$3,500 | $140 | $175 | $175 | $210 |
$4,000 | $160 | $200 | $200 | $240 |
$4,500 | $180 | $225 | $225 | $270 |
$5,000 | $200 | $250 | $250 | $300 |