Facts needed on NIS
THE Democratic Labour Party Government is being urged to provide Barbadians with a detailed account of the true state of the National Insurance Scheme (NIS).
In fact, the Opposition Barbados Labour Party (BLP) is urging Prime Minister, the Rt. Hon. Freundel Stuart, or the Minister of Labour and Social Security, Senator Esther Byer-Suckoo to, among other things, tell the country what is the true state of the reserves of the NIS, and what is Government doing to address increasing payments to the scheme to ensure its longevity?
In a statement released yesterday by Member of Parliament for St. George South and Shadow Minister of Labour and Social Security, Dwight Sutherland, he said the BLP remains very concerned about the financial integrity of the NIS, considering the present state of the Barbados economy. To that end, he maintained that Government needs to come with specifics on the state of the NIS, and stop giving “generalised assurances”.
Referring to last year’s Article 4 report on Barbados from the International Monetary Fund (IMF), he noted that the weak employment growth in recent years has led to a deterioration of the entity’s financial position, and that the NIS’ expenditure now exceeds its contributions. Such developments, he said, have occurred largely because of population ageing, minute economic growth, along with this Government’s consistent late payment of contributions, and their persistent late payment of rent for NIS-owned buildings.
“In the face of this, it is not good enough for the minister responsible for the NIS to just say the scheme is sound and not under threat, without giving specifics on what the Government has done, is doing, or hopes to do to deal with the deteriorating situation,” he contended.
He added, “This issue is critical, because the NIS was established primarily to create a social safety net for Barbadians, particularly from the lower income bracket, by providing them with pensions and other benefits, to ensure they can live with dignity in their twilight years. It is often the only income many of these individuals can depend on for their daily sustenance.”
He made the comments as he said that Government debt held by the NIS has doubled during the current Government’s period in office, moving from 18.9 per cent in the 2008/09 financial year to 36.1 per cent at the end of the 2015/16 financial year. He noted that the IMF’s Article 4 report released last year also revealed that the bulk of the NIS’ investment portfolio, 74 per cent, is held in government securities, well in excess of an earlier suggested prudential limit of 54 per cent, and the agency’s target of 60 per cent. He also quoted the report, which noted that given high contribution rates and the adjusted retirement age, there is limited scope to address future shortfalls other than by reducing benefits.
“It is time the Government states clearly why the NIS seems to sometimes be in crisis mode, as evidenced by the number of complaints on the length of time it takes to receive sick benefits, unemployment benefits and sometimes, pensions. The people of Barbados need to know whether their hard earned contributions to the NIS will be there, so that when they retire, they will be able to enjoy a pension and other benefits that are rightfully theirs,” he added in the statement.