EDITORIAL – Weighing the pros and cons of BOSS

The Barbados Optional Savings Scheme (BOSS) was first referred to,
possibly correctly, as a type of forced savings for public servants,
but was then likened to a national meeting turn to help the public
understand that there were benefits to be had from the scheme.

As it is now understood, the scheme will allow for public servants to
continue to have most of their salaries paid as usual with the balance
being paid with a four-year bond. After the four years when the bond
matures, the Central Bank will pay the sum owed along with the
accumulated interest, allowing Barbarians to earn some extra income.

Prime Minister Mia Mottley while addressing the press pointed out that
the interest rate of 5% was a comparatively good rate for an investor,
allowing them to have a reasonable return on their time and financial
investment. She further stated that the savings bonds would be very
desirable to non-governmental institutions and private individuals.
These persons would also be allowed to purchase those bonds earned by
public servants who are desirous of having their entire salary in cash
to cover their regular expenses.

Another point mentioned was that these bonds would be protected in the
event that the government decides to restructure its debt again. This
is very important as the public appears to be hesitant to trust the
Government with their savings while being advised by Dr. Don Marshall
of UWI’s Sir Arthur Lewis Institute of Social and Economic Studies
that the National Insurance Scheme was already in a precarious
position.

The Barbados Optional Savings Scheme seems to be a better alternative
than it would have been if presented in its initial stages of
planning, as the term forced savings brought to mind strict measures
for a country that has been over-powered by austerity measures from
more than one administration.

The most important aspect of BOSS to a layman is the O for optional,
as there are many persons who due to their financial circumstances
will be unable to take part in the scheme without threatening the
stability of their family lives. It would require further cuts to
expenditures that have already been streamlined through the years for
households to get by on the bare minimum so that they can pay all
necessary bills and taxes and avoid unnecessary debt.

Therefore, as long as the process for opting out of the scheme
partially or as a whole is simple and not detrimental to the public
servant, then it may be a brilliant option for the government to
remove some of the financial burden from themselves.

Those persons who are able to save sums of money from each salary can
use the scheme as an opportunity to multiply their savings, especially
those who save close to the percentage of their salary that they would
automatically receive in bonds.

However, for individuals who have been consistently unable to save,
the scheme might not be a viable option.

Each person and household should carefully consider their finances to
decide if the scheme can be effective for them. It is still hoped that
the idea of “forced savings” does not resurface because that could be
the last straw for many camels.

Barbados Advocate

Mailing Address:
Advocate Publishers (2000) Inc
Fontabelle, St. Michael, Barbados

Phone: (246) 467-2000
Fax: (246) 434-2020 / (246) 434-1000