National Insurance Scheme Reforms in the Caribbean

31 Pages Posted: 9 Aug 2017

See all articles by Koffie Nassar

Koffie Nassar

International Monetary Fund (IMF) - African Department

Joel Chiedu Okwuokei

International Monetary Fund (IMF)

Mike Xin Li

International Monetary Fund (IMF)

Timothy C. Robinson

University of North Carolina (UNC) at Chapel Hill

Saji Thomas

International Monetary Fund (IMF)

Date Written: October 2016

Abstract

Weighed down by population aging, slow economic growth, and high unemployment, National Insurance Schemes in the Caribbean are projected to run substantial deficits and deplete their assets in the next decades, raising the prospects of government intervention. With the region highly indebted, this paper quantifies the impact of three parametric reforms-freezing pension benefits for two years, raising the retirement age and increasing the contribution rate by one percentage point-that, if implemented, would put the pension schemes on a stronger financial footing. While the appropriate combination of reforms necessary to eliminate the actuarial deficits varies depending on each country's circumstances, most countries need to undertake reforms now or risk even higher taxes, lower growth and unsustainable debt dynamics.

Keywords: Jamaica, Insurance, Grenada, Haiti, Dominica, Dominican Republic, Barbados, Bahamas, The, Asia and Pacific, Aging, Antigua and Barbuda, Caribbean, Contingent liabilities, Western Hemisphere, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Trinidad and Tobago, Pension reforms, Social security, Old age pensions, Retirement, Public debt, Government expenditures and welfare programs, Social Security and Public Pensions, General

JEL Classification: H55, H50, H53

Suggested Citation

Nassar, Koffie and Chiedu Okwuokei, Joel and Xin Li, Mike and Robinson, Timothy C. and Thomas, Saji, National Insurance Scheme Reforms in the Caribbean (October 2016). IMF Working Paper No. 16/206, Available at SSRN: https://ssrn.com/abstract=3014029

Koffie Nassar (Contact Author)

International Monetary Fund (IMF) - African Department ( email )

1700 19th Street, NW
Washington, DC 20431
United States

Joel Chiedu Okwuokei

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Mike Xin Li

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Timothy C. Robinson

University of North Carolina (UNC) at Chapel Hill ( email )

102 Ridge Road
Chapel Hill, NC NC 27514
United States

Saji Thomas

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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