The Treasury Minister says he wants to start a national conversation about the long-term future and sustainability of the Manx National Insurance Fund.
Current estimates say that without reform, the fund will run dry by around 2047/48.
Among the proposals is replacing the ‘triple lock’ policy with another way to increase pensions each year in line with inflation. Any change would only affect those who reached state pension age after April 5 2019.
The Treasury has looked at a rage of options to delay the fund running out, but measures such as increasing the state pension age would only have a minimal impact.
Dr Alex Allinson has previously said that the triple-lock is “not sustainable in the long-term without putting increased pressure on those who pay National Insurance”.
Principles
To guide the debate on the future of the fund, the Treasury has recommended four policy principles to ensure that the Social Security Scheme “remains sustainable, protects pensioner incomes and does not place an excessive burden on those currently working and paying National Insurance, whilst also supporting the whole economy”.
1 – The value of the Manx State Pension will be protected
2 – Investment of the Fund will be restricted
3 – All expenditure from the Fund should be fully funded through NI contributions
4 – The policy principles will be reviewed every 5 years as part of the actuarial review of the Fund
Dr Alex Allinson said: “This sets out some of the options that Treasury has been considering to address the long-term funding issues that the Scheme is facing.
“I believe we need a national conversation about how we preserve the long-term future of our state pension system both for the pensioners of today, and of tomorrow.
“Over the coming months I will be engaging with Tynwald Members to develop a plan that will ensure the long-term sustainability of the current scheme. A further report will be provided prior to next year’s Budget.”
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