Brian O'Shea
Ceist:56 Mr. O'Shea asked the Minister for Social, Community and Family Affairs his estimate of the surplus in the social insurance fund in 2001 and 2002; and if he has further plans for these moneys. [20122/01]
Written Answers. - Social Insurance Fund.
It is projected that the social insurance fund will have an annual surplus in the years 2001 and 2002 of £434 million and £772 million, respectively. The cumulative surplus is projected to be £1,015 and £1,877 million, respectively, at the end of the years in question.
However, the figures for the potential annual and cumulative surpluses for 2002 do not take into account increases, in excess of prices inflation, in the rates of social insurance benefits and pensions or other changes which may be introduced in the next budget. In this regard, the Government has entered into a commitment with the social partners as part of the Programme for Prosperity and Fairness to increase the rates of all social welfare payments in real terms over the lifetime of the programme. Clearly, this and other developments are likely to have a significant impact on any emerging surpluses in 2002 and subsequent years.
As the figures indicate, the social insurance fund is in a healthy financial situation at the moment. The surplus is retained in the fund's investment account and invested for the benefit of contributors generally. This surplus will not continue indefinitely as ageing of the population will greatly increase demands on the fund over the medium to long term. Clearly, it is important that the fund's surplus should be used to best advantage having regard to emerging demands and the overall interest of its contributors.
As announced at budget time, the Minister for Finance and I will, during the course of this year, conduct an examination of possible strategies in this regard. In order to inform such an examination, my Department has engaged external consultants to conduct an actuarial review of the social insurance fund and this work is already under way. This review will build on the findings of the 1997 review in relation to social insurance based pensions as well as dealing, for the first time, with short-term benefits. It is envisaged that the review will be completed by October next and that the outcome will inform short to medium and long-term policy development in relation to the social insurance system generally as well as the emerging surpluses of recent years.