St. John’s, Antigua – Prime Minister Gaston Browne has defended the government’s decision to transfer part of the Jolly Beach Resort to the Social Security Board (SSB), calling it a financially sound and long-overdue move to stabilize the struggling pension scheme.

In a weekend radio appearance, Browne described the transfer of the 27-acre property, including 315 remaining hotel rooms, as a “smart investment”.

The government intends to transfer ownership to the Social Security Board, in exchange for $67 million in underperforming government bonds. Browne says the plan will allow Social Security to finally replace “junk bonds” with a performing asset that can generate hundreds of millions in revenue. The bond in question is a $330 million debt issued by the former UPP administration to the Social Security Board as part of a debt consolidation effort.

The bond was essentially a promise by the government to repay the money to Social Security over time, with interest. However, neither the UPP government nor the ruling Antigua & Barbuda Labour Party (ABLP) administration have made payments on it.

“We’re not seeking to give Social Security a non-performing asset. As it stands now, it is performing,” Browne said. “Last year, even in its dilapidated state, Jolly Beach made a profit of $4 million.”

“Social Security doesn’t have to spend a cent. We are giving it [the asset] to them to swap out non-performing government bonds,” he said. “Even if they were unable to make a success of Jolly Beach, they could sell it.”

He also noted that the board would not be required to invest cash up front as the government plans to pay an estimated $75 million in arrears to Social Security by raising a bond within 90 days. However, rather than placing the funds on deposit earning a mere 2% interest, Browne has recommended investing them into the government-owned Jolly Beach Resort, which he said has started turning a profit under the management of the Barrett Group.

“We are saying that between transferring the assets of EC$67 million to them, the existing asset, and then literally investing the EC$75 million that we’re going to give them for arrears that we owe them, that they can generate US$200 million in sales,” the prime minister explained.

Condo Sales to Boost Earnings

A key component of the investment plan involves selling 315 condo units under the Citizenship by Investment Programme (CIP) at an estimated US$300,000 each. Browne projected this first phase alone could generate US$100 million in revenue. “If we were able to, over a five to ten-year period, sell all 315 units at US$300,000 a piece, that will yield in the region of about US$100 million,” he explained.

A second phase, which allows Social Security to develop an additional 10 acres of land for 200 new rooms, could yield another US$100 million if units are sold at US$500,000 each.

“Even if only 10 percent of the units are sold per year, that’s about US$20 million in annual revenue,” the prime minister said, adding that homeowners would have limited use of the condos while Social Security earns rental income and maintenance fees to cover upkeep.

He also noted that Social Security will be required to report on the investment’s performance quarterly to Cabinet.

The hotel operations will continue to be managed by the Rob Barrett Group of Companies, which has so far helped turn it around financially.

Browne criticized previous Social Security leadership for passively holding deposits in local banks, which led to the depletion of hundreds of millions of dollars and rendered the scheme nearly insolvent by 2010.

The scheme was stabilized through “parametric” changes made in 2016, including the gradual increase in retirement age and contributions. As of January 1, 2025, the official pensionable age is 65, and contribution rates now stand at 16 percent for private workers and 15 percent for public employees.

Board Director David Matthias previously stated that many of the scheme’s assets were tied up in infrastructure and not yielding sufficient returns. However, he has not publicly commented on the Jolly Beach investment.

During COVID-19, supplementary contributions to the scheme by the government was the leading contributor to the scheme ensuring that roughly 9,000 of 11,000 pensioners and retirees were paid on time.

As of early 2021, the fund required at least $14 million monthly to operate, with the government currently contributing about EC$3 million each month to help cover the shortfall.

While critics, including former Finance Minister Harold Lovell, have questioned the viability of such an investment, Browne insisted that the move is both prudent and overdue.

“It is widely practiced by all pension schemes globally. You cannot sustain Social Security just by collecting premiums and putting them in the bank. It must develop a sustainable investment portfolio,” he said.