Long-term Social Insurance in the Caribbean: Beyond Parametric Reforms

This report analyzes the long-term pension branches of Caribbean National Insurance Schemes, focusing on old-age and survivors benefits. These systems, which are defined-benefit and therefore depend largely on demographic patterns, are under growing financial strain from population ageing, limited local investment opportunities, emigration of working-age people, and exposure to climate and economic shocks. Using actuarial reviews, financial data, and a survey across eight countries, the study assesses financial performance and closely examines administration from registration, contribution collection and finance management through benefit payments as well as investment management and governance.
It identifies operational and governance weaknesses that speed up financial problems and proposes concrete administrative reforms to address them. It also introduces clear indicators to track solvency and investment performance, including how long reserves will last and whether returns keep up with inflation and liabilities. Moreover, it presents practical innovations to strengthen funding and share risks, such as a “Unitized Longevity Account” and a “CaRIBond,” along with principles for regional pooling to improve scale and oversight.
Ultimately, parametric reforms alone are not enough if operational issues persist. By strengthening administration, governance, and investment, the recommendations in this report can improve system performance and, importantly, build the credibility and legitimacy needed to make parametric reforms politically feasible.