The Caribbean Connection Organised by Kring Internationaal Johan de - PowerPoint PPT Presentation

The Caribbean Connection Organised by Kring Internationaal Johan de Witthuis, Utrecht, 23 april 2015

Welkom Welcome Wilkommen Bienvenida Bienvenu Bem-vindo Velkommen Benvenuto Välkommen Tervetuloa D obrodošli Witaj

Program 16.30 Doors open 17.00 Welcome and introduction of the guests by Caroline Tuin, Chairperson Kring Internationaal 17.05 General pensions in the Netherlands by Stephan Buckens, Coordinator Kring Internationaal 17.15 General Pensions in Suriname by Ilemele Venetiaan, Coordinator Kring Internationaal 17.45 General Pensions in Curaçao by Stacey René (live from Curaçao) 18.15 Q&A 18.30 Closing drinks and networking opportunity 19.30 Doors close

Welcome and introduction of the speakers Caroline Tuin

Agenda • Welcome • Introduction of our guests

Welcome On the second meeting of the Kring Internationaal

Introduction of our guests • Stephan Buckens – Coordinator Kring Internationaal – Dutch actuary since 1997, who originally studied Econometrics at the University of Tilburg – Since 2012 working for Philips Pensionfund in Eindhoven in a consulting actuarial role for the Board. Before working at Philips he has worked for 5 years at Aon and 10 years at Towers Watson as a consulting actuary.

Introduction of our guests (2) • Ilemele Venetiaan - Coordinator Kring Internationaal - Actuary in Suriname since 1995, who studied actuarial science in Amsterdam - Since 2005 owner of Active Consultancy NV. Before she worked at Ernst & Young In Suriname - Chairperson of Quota International of Suriname

Introduction of our guests (3) • Stacey René - Actuary from Curaçao, who studied Econometrics at University of Tilburg - Since 2013 she is charge of the Montae Caribbean office located on Curaçao. She works as an actuary and consultant serving clients on all the Dutch Caribbean islands. - Before moving back to Curaçao, she worked for 6 years at Aon Hewitt in the Netherlands

General Pensions in the Netherlands Stephan Buckens

Agenda • Pension System • Some social security changes

Pension system STATE OCCUPATIONAL PRIVATE Pay-as-you-go Employers/Industry wide Voluntary Secures minimum ‘ Mandatory ’ standard of living DB or (C)DC I II III

Some social security changes 1. Changes in pensions act and regulations 1. nFTK (New Pension Act) 2. “Witteveenkader” – fiscal maximum salary 100k 3. Above 100k net annuity or net pension 4. Pension accrual maximum 1.875% (average pay) 5. Pensionable age 67 2. Labour market and employment 1. Review tax system, goal is to simplify 2. Improve mobility 3. Other (income) plans 1. Life cycle savings scheme 80% taxed (no longer as of 2016) 2. Old age (AOW) – faster increase 1. March 27, 2015 – faster increase AOW-age: age 67 in 2021 (was 2023) 2. As of January 1, 2016: AOW-age is 65 years 6 months (was 65 years 5 months)

General Pensions in Suriname Ilemele Venetiaan

Agenda 1. Brief introduction: Social Security in Suriname 2. Contents of the General Pension Act 3. Financing of benefits resulting from the General Pension Act 4. Closing

1. Brief Introduction Social security in Suriname − General Old Age Allowane (“ Algemene Oudedagsvoorziening AOV”) − National Basic Health Insurance (mandatory) − Minimum wage − Other: − Children’s allowance − Disability allowance − Etc. etc. (mandatory paid maternity leave, mandatory casualty insurance, …) − General Pension Mandatory pension for all workers in Suriname •

The General Pension Act Material Content: Organization and management Obligations Benefits and rules Financing: Contributions Alternatives

The General Pension Act; Material Content (1) – Plan executor: The General Pension Fund under the supervision of the Pension Board, which is responsible for making sure all parties adher to the Act. – Effective date: December 8 th , 2014 – Employer obligation: Every employer is obligated to offer his/her resident employees a pension plan, that provides benefits equal or more than those in the General Pension Act.

The General Pension Act; Material Content (2) – Existing pension plans: Employers with existing pension plans had 30 days after the effective date to submit documents to the Pension Board, for their plan to be assessed whether it was up to minimum standards. If the plan was labeled below standard, the employer had 30 days to: Modify the plan rules or • Enroll employees in the national plan and terminate the • existing plan.

The General Pension Act; Material Content (3) − Benefit payment rights: • A participant will only receive General Pension payments if contributions are made for 5 or more years. − Contributors: • All working residents (including self employed) are obligated to pay contributions, except if participating in a permitted company plan. − Contributions: • The employer is obligated to withhold General Pension contributions from employees’ salaries and timely pay both employee and employer’s contribution to the fund.

The General Pension Act; Material Content (4) − Pensionable salary: Participant’s wage excluding overtime, vacation and other incidental allowances, from a monthly minimum of SRD.500 to a maximum of SRD.5000. − Retirement age: 60 th Birthday − Service year: A period of one (1) year during which contributions were made.

The General Pension Act; Material Content (5) Benefits at retirement age: • General Pension is derived from the following formula: # Service Years * 2% * Average PS Where: Average PS = Average pensionable salary of last 60 months prior to retirement

The General Pension Act; Material Content (6) Benefits at death: One-time grant of 2*monthly pension upon • death of a retired participant. Spousal Pension: • – 70% of the deceased’s (potential) General Pension. – Paid out temporarily for a maximum of 10 years. – If participant is not married, partnership must have been legalized at notary for five years or more at time of death, for spouse to be eligible for spousal pension. Orphans’ pension : • 70% of deceased’s (potential) General Pension, paid out only if no spousal pension is paid, until the youngest eligible orphan reaches the age of 21.

The General Pension Act; Material Content (7) • Disability Pension: – Right granted upon being classified as permanently disable to perform one’s profession. – Disability Pension = Potential General Pension. • Pension benefit buy in: – Participants can buy in up to 2 years of pension benefits. – Within one year of the Act’s commencement Suriname nationals can buy in a pension benefit of SRD.300/month. • Minimum pension benefit: SRD.300/month

The General Pension Act; Material Content (8) • Organizational structure: – A Pension Board sees to all parties adhering to the Pension Act. – The General Pension Fund will be responsible for the operations involved in carrying out the Pension Act. • Sanctions: – Parties not adhering to the contents of the Pension Act risk penalties between SRD.500 and SRD.100,000.

The General Pension Act; Financing • Contributions: – Monthly premium = 3% of pensionable salary (PS). – As of January 1 st , 2016 contribution rate will annually increase by 0.5% of PS to a maximum of 28%. – Monthly PS per participant: o Minimum SRD.500 o Maximum SRD.5,00. – Employee pays a maximum of 50% of total contribution. – Employer pays a minimum of 50% of total contribution.

The General Pension Act Financing

Financing • The financing system is based on year to year “pay as you go” • Initially contribution rates are low, as the system starts with zero retirees. • Contribution rates will rise steeply over time as number of retirees will quickly grow during the first decades, whereas the number of contributors will not. • The Pension Act states: – Contribution rates will increase by 0.5% annually. – Contribution rates will not be higher than 28%. • Will this annual increase be sufficient on the long run?

2012 Suriname demographics Source: Algemeen Bureau voor de Statistiek; Census 2012 • Suriname’s demographics chart is still pyramid shaped. • The base however looks to be narrowing, although the 0-4 category is larger than the 5-9 category.

Pay as you go financing and alternatives • Will annual fixed payg premiums be sufficient for the scheme to be self supportive? Alternative financing: • Fully Funding: – Initial contributions several times higher than initial payg. – Long term contributions most likely to stabilize under “normal” economic circumstances. • Partial Funding: – Terminal funding o Initial contributions also several times higher than initial payg. o Long term contributions most likely also high and will remain upward trend. – Multi year payg o Mitigation of steep increase characteristic for year to year payg.