Low Remittances cause delay in pension payments

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By Elesha George

The failure by certain companies to pay social security benefits on behalf of their workers has caused pension payments to be delayed for the last few months.

A statement posted on the Social Security Scheme’s (SSS) Facebook page late August, suggested that the organisation was “experiencing funding challenges due to the low returns of remittances.”

When OBSERVER called to inquire about nonpayment to at least two banks, David Matthias, Director of the Social Security Scheme, told our newsroom that “throughout the last few months, we have had several sectors of our economy, specifically in this case, the distributive trades; that is hotels and the like as well as the security firms, indicating that they have had some delays in the meeting of their cashflow.”

He explained that once there is a delay in the receipt of the contribution, which is the responsibility of the employer to social security, there is a corresponding delay in making payments to the beneficiaries.

At present, Social Security operates on a “pay as you earn” system, which means that salaries of the working population go towards paying pensioners each month. The scheme would then issue out payments like pension and other benefits.  The later that employers submit payments, the later pensioners are paid.

For the month of August, pensioners who bank with the Bank of Nova Scotia and the Royal Bank of Canada are still waiting to get their money. Pensioners who bank elsewhere have already been issued their money for that month.

Matthias explained to OBSERVER that payments are issued each month in an order of rotation. So, the people who bank with the Bank of Nova Scotia and Royal Bank of Canada were the first to receive payment in July, so automatically they will be the last set of people to be paid in August.

The Scheme hoped that pensioners would be able to receive their money yesterday (Wednesday, September 11th 2019).  “We expect that we will be able to credit Royal Bank and hopefully clear Bank of Nova Scotia by this afternoon [Wednesday],” he said. In the meantime, Matthias said the scheme’s inspectors will continue to do their best to ensure that there is compliance with the Social Security Act, specifically that payments are made.

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