Twelfth actuarial review of the Dominica Social Security system

Twelfth actuarial review of the Dominica Social Security system as at 31 December 2014 1. Project summary A review of the current financial situation of the schemes as well as an actuarial valuation of the status-quo situation of the schemes will be carried out. Based on the observations, a set of reform options of the scheme and actuarial assessments of the reform options will be presented to ensure its long-term financial sustainability. In addition, the project will assess Dominica’s ability to introduce a distinct and sustainable social non-contributory pension programme expected to take account all existing social programmes in order to avoid duplication of coverage and efforts. Finally, the project will provide actuarial trainings of the DSS staff. 2. Background and Justification 2.1. Problem analysis According to Section 18 of the Social Security Act of Dominica, the Board of the DSS shall recruit the services of an actuary to review the experience of the DSS, normally on a triennial basis. The Eleventh Actuarial valuation was delivered as of the valuation date of 31st December 2011. The DSS provides benefit schemes for long-term benefits at retirement, invalidity and death. Short-term benefits are provided in case of sickness and maternity. The Employment injury benefit branch provides short- and long-term benefits as well as medical coverage. The Social Security Act envisages that social insurance coverage is offered to the entire population of Dominica above the age of 16 and gainfully employed. Self-employed persons are covered on a voluntary basis if their earnings are above a threshold amount. The Eleventh actuarial report provided a series of recommendations to address the long-term financial sustainability of the DSS and the appropriateness of benefits. Such recommendations addressed the adjustments to the minimum pension, indexation of Maternity and Funeral grants, waiting period for eligibility to employment injury benefits, compliance with the Investment Policy, voluntary contributors and Dominican nationals living abroad, transfer of reserves between branches as well as the contribution rate schedule. The current valuation will report on the actuarial and financial condition of the Dominica Social Security, namely on the sufficiency of its funding to meet its benefit and other obligations according to the provisions of the Social Security Act. As requested by the DSS, the current valuation will also assess Dominica’s ability to introduce a distinct and sustainable social non-contributory pension programme expected to take account all existing social programmes in Dominica in order to avoid duplication of efforts 2.2. Target groups and Partners The direct recipients of the project will be policy makers, managers, technical staff and social partners in Dominica involved in the design and implementation of social security and employment policies. The ultimate beneficiaries will include all male and female workers covered by the Labour Law in Dominica through the social security scheme whose financial sustainability is secured by a periodical actuarial valuation. The assessment of Dominica’s ability to introduce a distinct and sustainable social non-contributory pension programme expected to take account all existing social programmes will also profit all males and females with no decent revenue at retirement. In addition to the Dominica Social Security (DSS), the following partners/constituents will be directly or indirectly involved in the project: • The Ministry of Finance, • The Ministry of Economy, Planning and Development, • The Ministry of Labour, • The Ministry of Health, • The Dominica Trade Union (DTU), • The Dominica Employer’s Federation (DEF), and • Other agencies that will be determined (based on its relevancy) during the study. Social partners are responsible for the discussions and endorsements for possible implementations of the recommendations of the ILO report, while the Government partners a

Project symbol

DMA/15/01/DMA

Admin unit

SOCPRO

Start date

01/04/2016

End date

15/04/2018

Total allocation

91189

Total expenditure

Status

Closed

90625

Development Partners

Dominica, Social Security

Country/Countries

Caribbean Islands

Outcomes

Creating and extending social protection floors