The Government Actuary's Department (GAD) undertook reviews of 2 Jersey social security funds - the Social Security Fund (SSF) and the Health Insurance Fund (HIF) - as at 31 December 2021.
The results of the reviews were presented to States Members in Jersey in a visit during June 2023.
The reviews of both funds assessed possible future levels of expenditure, and the contribution rates required to finance this expenditure. GAD 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
Results
Social Security Fund
The SSF provides state pensions and other security benefits to Jersey residents. The review calculated projections of the fund from 2021 to 2081 under a range of scenarios. The report concluded the SSF remains in good health and is expected to be able to pay benefits out for several decades.
The review found that the reduction in income to the SSF during the COVID-19 pandemic, was offset by strong investment performance over the period.
The projections were generally more favourable than the last review at 31 December 2017. The improvement in results 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 may have a significant influence on the Fund's future sustainability.
Health Insurance Fund
The HIF provides healthcare benefits to residents of Jersey, including GP and pharmacy costs. Our projections cover 20 years, a shorter period than the SSF review, due to the shorter term nature of the benefits.
The HIF's balance was lower than we had projected in 2017, due largely to unanticipated payments from the Fund. These were offset in part by better-than-expected investment performance. However, there is an improvement in the HIF projections since the 2017 review, due to economic factors.
Our review found the Fund is projected to decline over the next 20 years. This is largely due to expected increases in pharmaceutical costs and growing demand for healthcare associated with an ageing population. The results are expected to help inform the Government of Jersey's review of healthcare funding.
