Found at: http://www.anguillaguide.com/article/articleprint/4553/-1/140/
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Social Security In Retreat
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A one-day Social Security System Governance and Investment Retreat was held at Cuisinart Hotel and Spa Conference Room on Friday 30th March. The fifteen participants included the Minister for Social Security Honourable Victor Banks, members of the Anguilla Social Security Board, its Investment Committee, its Senior Management and its Solicitor Mr. Alex Richardson of Alex Richardson and Associates. Dr. Aidan Harrigan, Chairman of the Social Security Board chaired the day’s proceedings and discussions were led by Mr. Timothy Hodge, Director of Social Security, and Mr. Alex Richardson.
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Participants in the retreat
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The purpose of the Retreat was to consider corporate governance in the Social Security System, to examine the Board’s investment guidelines and performance, and identify new strategies for investment. In his opening remarks the Honourable Victor Banks reiterated his belief that the Anguilla Social Security System is the single most important institution for the benefit of the people of Anguilla and its economic development, and stated that the growth of the Fund through prudent investment is critical if it is to continue to pay meaningful benefits without increasing the contribution rate, and to play its developmental role.
Mr. Alex Richardson’s presentation on Corporate Governance highlighted various aspects of the subject both from a legal viewpoint and from the practical benefits of effective corporate governance throughout the Social Security System. The Director of Social Security then spoke of the fiduciary role of the Social Security Board, which must exercise duties of loyalty and care in the management of the funds entrusted to them on behalf of employed persons. He outlined the Board’s role in the compilation of Draft Corporate Governance Principles for Caribbean Countries at forums organized by the Eastern Caribbean Central Bank and the Eastern Caribbean Securities Exchange, and in organizing last year’s meeting in Anguilla at which Government, the business community and the legal fraternity considered the draft principles and their applicability. These Principles have recently been commended to the Social Security and other institutions in the ECCB member states. The Director reported that the Governor of the ECCB Sir K. Dwight Venner has asked the Anguilla Social Security Board to lead on the adoption of the six (6) principles within all the social security systems in the region.
It was agreed that the Board would adopt the principles, and in accordance with Principle VI, it would develop a code of conduct and corporate governance framework for its directors including ongoing training. The Board also resolved to promote the adoption of the principles throughout Anguilla. It was agreed that public education forums on corporate governance would be necessary, for it was recognized that institutions like social security do not exist in a vacuum and for effective corporate governance there must be an environment of effective corporate governance and best practice throughout the country. The Anguilla Financial Services Association and the Anguilla Chamber of Commerce and Industry were identified as vehicles that would be approached to promote the adoption of the corporate governance principles island-wide.
The Director then made a presentation on the Social Security System’s Investment Experience over its first 25 years. The Board presently has 73% of its investment portfolio invested locally with more than 63% in fixed deposits. With the present boom in the economy and the rapid growth of investable funds, the Board would have to look to reduce the percentage held in term deposits by identifying creative avenues for investment under the guiding principles of security and profitability. Alternative investments locally can include Government Treasury Bonds and Treasury Bills if issued, and investments through a subsidiary investment company, while in the region the Board can take advantage of the listings on the ECSE and the growing Bond Market.
The Retreat considered the existing Investment Guidelines and the parameters within which to invest, and found them to be adequate. It was agreed that they should be reviewed on an annual basis. In keeping with its stated intention to be more transparent in its operations especially in terms of its investments, the Board will communicate with its stakeholders through its Annual General Meeting to be held in July, publication of its audited accounts in the local newspapers, and through its Annual Reports.
The Retreat continued with discussions on a subsidiary investment company which would allow the Board to make economically targeted investments. This would have to be a separate legal entity through which the Board could proactively consider investment opportunities, participate in more development projects, and benefit from the accounting treatment of invested funds in accordance with International Financial Reporting Standards. The Retreat agreed to move forward with its new investment strategies and under the advice of its Solicitor to approach Executive Council to put forward a case to amend the Social Security Act to allow for the incorporation of the Subsidiary Investment Company. This would be similar to NIPDEC in Trinidad and Tobago and NIPRO in St. Lucia, subsidiaries of the social security systems in those countries.
The very productive Retreat was part of the ongoing activities marking the 25th anniversary of the Anguilla Social Security System’s service to the people of Anguilla under the theme 25 years of Achievement: A Lifetime Commitment.