After four years in deficit, the island’s National Insurance Fund is back in balance.

Latest Manx National Insurance Fund accounts to be laid before this month’s Tynwald sitting shows its operating balance returned to suplus in 2016-17.

For the previous four years, spending on state pensions and other benefits exceeded NI contributions paid into it.

The fund’s operating account went into deficit for the first time in the 2012-13 financial year, by a total of £14m.

This deficit reduced to £10.4m the following year but then rose again to £18.5m in 2014-15 before dropping to £9.15m in 2015-16.

These shortfalls had to be covered by transfers from the fund’s investment income.

But during the year 2016-17, the operating account was in surplus even before a £5,250,000 transfer from investment income, which left a closing balance of £8,525,340.

The balance of the NI Fund at the end of March last year was £756,446,000 compared with £727,387,000 the previous year - an increase of £29,059,000. Investment income totalled £27,371,000.

A total of £137,890,540 was paid on the state pension, up from £135,325,085 the previous year.

But payments of the Manx Pension Supplement reduced slightly from £36,862,306 to £36,742,274.

At April 2016, the overall value of the fund was 5.4 times annual benefit expenditure.

In her report, chief financial officer Sheila Lowe (pictured) lists the risks to the fund. These include changes in policy across given that expenditure from the fund is in large part determined by the UK which sets most contributory benefits and their rates.

Brexit may also affect investment returns in the short to medium term.

Treasury is seeking to progress reform of state pension and benefits. Recommendations focus on five key areas - the future of state pensions, National Insurance, working age benefits, workplace pensions and the island’s relationship with the UK.

The island has opted not to follow the UK’s single tier flat rate state pension. A new Manx state pension is proposed to be introduced in April 2019.