Pensions and Benefits Date : March 2015. How to vote 1 You need to check your handset is set to the correct channel. Press this arrow and if the display.
Post on 17-Dec-2015
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How to vote
1You need to check your handset is set to the correct channel. Press this arrow and if the display shows “CHAN 1” then great. If not, let someone know.
2To vote you just need to select the number you want to answer with and it will show up on the display.
3Then press [ OK ], a little green light will flash and then your display will say OK. This means your vote has been registered.
When the vote has ended for the question your screen will go blank,
ready for the next vote.
The principles of social security
To address poverty (individual and family)
To be simple and transparent
To encourage people to work (where they can)
Why do a review?
Pensions and benefits in the Isle of Man are complicated, expensive to run and will not be affordable in the future
We need a simple, fair and sustainable system
This is not new……
• Demographic Changes – the “ageing population”
• Pensions Act 2007 - Reform of State Pensions in UK to be applied in IOM
• Need to review Pension Supplement Scheme to ensure sustainability in long term
• Financing of nursing care in nursing homes• Financing of long-term care • Review of existing benefits programme
Social Security - Main issues for consideration
A complicated system
The state retirement pension is made up of six parts
It is very difficult to understandThe benefits system has 21 parts - all with their
own rules!The system was designed for the UK not the Isle
of Man
Affordability
State pensions and most benefits are paid out of National Insurance Contributions, and annual benefits are now costing more than we receive in contributions
We have a lot of contributions saved in a fund, but this will run out if we don’t make changes
Ci65’s forecast
INSERT CI65 GRAPH SHOWNING POSSIBLE FUTURE
-
200
400
600
800
1,000
1,200
1,400
2012
£M
Projected NI Fund Balance Projected Total Income Projected Total Benefit outgo
Mercer Base - NI Fund Balance Mercer Base - Total Income Mercer Base - Total Benefit outgo
2022 2032 2042 2052 2062 2072
What did Ci65 say?
Only changes to pensions or national insurance contributions will make a real difference to the future of the National Insurance fund
The current system is not affordable in the long-term
Minor changes will not be enough – “only bold transformation will do”
Question 1
0
1 - Strongly Agree
2 - Agree
3 - Neutral
4 - Disagree
5 - Strongly Disagree
Do you agree that action is needed?
Question 1 - Results
1 - Strongly Agree
2 - Agree
3 - Neutral
4 - Disagree
5 - Strongly Disagree
0%
0%
0%
0%
0%
Do you agree that action is needed?
A new Manx pensionFlat rate pension of around £180 per weekBuild-up over 45 years Minimum of 10 qualifying years before any
pension rightsPension increased each year in line with
average earningsLater retirement ageYou have some choice about when to draw your
pension
Protection
Existing pensioners will be largely unaffected
The pension supplement will be gradually removed over a 20 year period
Your views?
Is a flat rate pension a good idea?Should the build-up period match people’s
actual working lives?Should you have a minimum number of
qualifying years before getting a pension at all?Should the state retirement age go up?
Your views?
Should you have some choice about when you take your pension?
Should we protect existing pensioners from any changes?
Should the Manx pension supplement be gradually removed?
Question 2
0
1 - Strongly Agree
2 - Agree
3 - Neutral
4 - Disagree
5 - Strongly Disagree
Do you think that the Idea of a Manx Retirement Pension is a good idea?
Question 2- Results
1 - Strongly Agree
2 - Agree
3 - Neutral
4 - Disagree
5 - Strongly Disagree
0%
0%
0%
0%
0%
Do you think that the idea of a Manx retirement pension is a good idea?
National Insurance
With a new Manx pension –
Contributions need to match the cost of benefits
Changes must be – competitive for our economy– simple and fair for everyone
Ci65 suggested
Trying to make contributions from self-employed and employed people the same
Thinking about whether people who contribute should get a better deal
Making the system encourage employmentMaking the system simpler
Your views?
Should we keep a National Insurance system?Should employed and self-employed people pay
the same to get the same benefits?Should actually paying National Insurance
contributions give you a better deal from the system than people who don’t?
Would a simpler system be better?
Question 3
0
1 - Strongly Agree
2 - Agree
3 - Neutral
4 - Disagree
5 - Strongly Disagree
Are some changes to the National Insurance System needed if we keep it?
Question 3 - Results
1 - Strongly Agree
2 - Agree
3 - Neutral
4 - Disagree
5 - Strongly Disagree
Are some changes to the National Insurance System needed if we keep it?
0%
0%
0%
0%
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Saving for retirement
The state pension may only meet part of our financial needs in later life
Workplace and personal pensions already address this
What about those without workplace or personal pensions?
UK now has compulsory workplace pensions and Ci65 recommended that the Isle of Man should think about something similar
Ci65 recommendations
Everyone earning over £9,500 would be in a workplace pension scheme unless there is one already
The new retirement saving scheme would be set up by the Government
Employees would contribute 6% and employers 4% on earnings up to £60,000 per year
Question 4
0
1 - Strongly Agree
2 - Agree
3 - Neutral
4 - Disagree
5 - Strongly Disagree
Would some form of compulsory savings scheme for retirement be a good idea?
Question 4 - Results
1 - Strongly Agree
2 - Agree
3 - Neutral
4 - Disagree
5 - Strongly Disagree
Would some form of compulsory savings scheme for retirement be a good idea?
0%
0%
0%
0%
0%
Working age benefits
16 of our 21 benefits are for working age people - all with their own rules
Ci-65 recommended that we simplify our benefits system and make it responsive to the needs of the Isle of Man
They proposed a ‘new Manx benefit’
New Manx benefit
Manx benefit - a means-tested basic amount, based on who lives in a household
Additions to cover specific needs whether
permanent (disability) or temporary (sickness, maternity)
New Manx benefit
A simpler, faster, more transparent systemNo need to submit new claims when you move
from one benefit to anotherCheaper to administerSupports people in need but encourages them
to move “up and out” of benefitsA guarantee that people will be better off in work
than on benefitsIt might include a benefit cap
Your views?
Should we have a benefits system which suits the Isle of Man and control when we want to change it?
Should the system overall encourage people to be in work?
Should we introduce a benefit cap?
Question 5
0
1 - Strongly Agree
2 - Agree
3 - Neutral
4 - Disagree
5 - Strongly Disagree
Do you think that the New Manx Benefit sounds like a good idea?
Question 5 - Results
1 - Strongly Agree
2 - Agree
3 - Neutral
4 - Disagree
5 - Strongly Disagree
Do you think that the New Manx Benefit sounds like a good idea?
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