THE Social Security Minister has moved to reassure Islanders that the Island\u2019s pension funds are in a \u201cstrong position\u201d, as she hit out at \u201cscaremongering\u201d criticism of plans to take \u00a350m every year for the next four years from the grant to the Social Security Fund.<\/p>\n
Plans to reduce the annual contribution to the fund were revealed in the government\u2019s 2026 Budget, sparking strong criticism from senior backbench politician Deputy Sir Philip Bailhache.<\/p>\n
\u201cWe seem to be unable to control our expenditure,\u201d he said, adding: \u201cNearly a quarter of a billion pounds is indirectly coming from a fund which supports the payment of pensions and benefits for our children and grandchildren.\u201d<\/p>\n
Those concerns were echoed by former Senator Ben Shenton, who, writing in the JEP on Wednesday, argued: \u201cPlundering reserves to meet current spending is not a recipe for stability \u2013 it\u2019s a recipe for future crisis.\u201d<\/p>\n
But, responding, Social Security Minister Lyndsay Feltham hit back at \u201cmisconceptions\u201d she said had \u201ccrept into the public debate\u201d.<\/p>\n
She said there was \u201cmore than enough money in the funds to continue paying pensions\u201d \u2013\u00a0 with reserves of over \u00a32.5 billion \u2013 \u201cenough to pay pensions for the next seven-and-a-half years even if no more money were paid in\u201d.<\/p>\n
\u201cThis is far more than other national pension schemes: Guernsey and the Isle of Man have enough reserves to cover four years, while the UK\u2019s would cover less than a year. And our funds will continue to grow over the next four years,\u201d she added.<\/p>\n
Deputy Feltham went on to defend against claims that money was being siphoned to cover everyday spending.<\/p>\n
\u201cThis is not true. It is important that any debate on this is based on fact, not scaremongering,\u201d she said, explaining that the decision would allow government to \u201cmake crucial investments in our health service and in our Children\u2019s Services, expand the support we give parents through the provision of free childcare, and extend our support for healthcare to more pensioners\u201d.<\/p>\n
The redirected funding will include \u00a328 million for healthcare, \u00a38 million for improvements to Children\u2019s Services, \u00a33 million to expand free childcare, and \u00a32 million to support Islanders and strengthen communities, including the expansion of the Pension Plus scheme, the Minister said.<\/p>\n
She added: \u201cA temporary reduction in the States Grant to the Social Security Funds unlocks the money to do all this \u2013 without compromising our ability to pay pensions.\u201d<\/p>\n
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