Actuarial Review of The Social Insurance Fund 31 December 2015


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Executive Summary

1.1 Background

The Social Welfare (Consolidation) Act, 2005 makes provision for the carrying out of actuarial reviews of the Social Insurance Fund at five yearly intervals.

Following a competitive tender process, KPMG has been appointed by the Department of Employment Affairs and Social Protection to carry out this fourth actuarial review (“Review”) of the Social Insurance Fund (“Fund” or “SIF”) with an effective date of 31 December 2015 in order to meet this legislative requirement and with a view to informing both short to medium term and long term policy development in relation to the social insurance system generally. This Review builds on the findings of the 2000, 2005 and 2010 Reviews in relation to social insurance based benefits and pensions.

The scope of the Review is set out in Chapter 2 and the original scope from the Request for Tender (“RFT”) issued by the Department of Employment Affairs and Social Protection (“the Department”) is included in Appendix 9.

The Review covers a 55 year period from 2016-2071 whereas the 2010 Review had covered the 55 year period 2011 - 2066.

The main social insurance benefits paid by the Fund relate to retirement, illness, incapacity, unemployment, maternity and bereavement. It is funded by PRSI contributions from employees, employers and the self-employed, with a subvention from the Exchequer where there is a gap between income and expenditure. A description of how the Fund works is set out in Appendix 1 and readers are advised to familiarise themselves with this content in order to better inform their understanding of this report.

We have developed a financial projection model which underpins the analysis presented in this report. The model will be delivered to the Department by no later than Quarter 4 2017 as requested in the RFT.

Before commenting on the results, it is important to emphasise that long-term projections are, by their nature, unlikely to be borne out in practice. We would encourage readers to focus on the trends which emerge over the period and on the relativities between projected incomes and expenditures under the base case and the various scenarios, rather than on the absolute results for individual years. Our reliances and limitations are included in Appendix 11.

 

Actuarial Review of The Social Insurance Fund 31 December 2015

 

Last modified:18/10/2017