NIS backlog being actively addressed

In an effort to fast track outstanding financial statements, from November 1, a team of auditors are expected to be assigned on a full-time basis to deal with the present backlog at the National Insurance Scheme.

This was revealed by Chairman of the National Insurance Board, Dr. Justin Robinson, during the reopening ceremony of the Male Barracks and Gym on Monday. The Chairman commented that the backlog was “unacceptable” as financial statements need to be prepared on time. However, he said that it would take effort and time to clear it and it is being actively addressed.

The Chairman added that the Auditor General, NIS and Ernst and Young (official audit firm for NIS), have been working together to take forward the process. He also informed the audience that he had received an update from the Auditor General. He said that the Auditor General’s letter showed that Ernst and Young will complete the 2007 audit by the end of November and 2008-2009 audits should be ready by the end of December, 2017.

Auditor’s challenges
Dr. Robinson explained that the work with Ernst and Young has been moving a lot slower that expected. He said that one of the major reasons was that when the Ernst and Young came back with the 2005-2006 opinion, they were rendering a “no opinion”.

“As a board, we sat down and deliberated. We took the decision that for such a major entity like NIS, it would be problematic and it would damage the image of the institution and the country further – if we were to accept a no opinion,” said
Dr. Robinson.

The Chairman stated that in the interest of the image of the institution that they needed to take the time to reconstruct what occurred. He added that if it was not dealt with for those two years, those same issues might come up in
subsequent years.

Addressing public concerns
During his remarks, he noted that the Board takes its role, the actuarial review and the public concerns very seriously. In terms of the review, Dr. Robinson clarified some of the concerns made recently in the media. He said there was quite a bit of mystique and a suggestion that the NIS was reluctant to make the actuarial review public.

“The NIS can only make the review public after it has been officially laid in Parliament. I am in possession of a letter dated October 18, 2017, which was
delivered to NIS on October 23, 2017; noting the laying of the review in the House of Assembly on September 26 and in the Senate October 11, 2017. As it is customary, once we get this letter from Parliament, the review is posted on our website and it was immediately posted,” said Dr. Robinson.

No need for pension fund reform
He pointed out that a pension fund like the one in Barbados does not go on forever. He added that at some point if the fund is to be sustainable, you have to engage in pension reform. In the 1990s, he reported that the fund became unsustainable and there was reform in 2003 which put the fund on sound footing. However, with the publication of the recent review, Dr. Robinson said that it did not suggest any reform of the fund at this time unless there is continued weak economic growth.

“If the average economic growth of the future continues to be 0.75 per cent or lower, the fund would likely have to engage pension reform at an earlier date than previously anticipated. Such reform would come somewhere between 2028 and 2045. The review also suggested that the National Insurance Fund would face some challenges if the Government of Barbados was unable to pay its debt,” said Dr. Robinson.

He acknowledged that the challenge of sustainability and viability of the fund is reflective of what is happening in the Barbadian economy. He noted the past decade of weak growth and stated that if this was to continue the future of the fund would be challenged.

In his final remarks, Dr. Robinson said that the National Insurance Scheme has funded the year-long project of the Male Barracks and Gym to a cost of approximately $2.2 million. He added that once the liquidity of the NIS commences, the institution will continue to invest in projects which advance Barbados.