For the past five years benefit payouts by the National Insurance Board (NIB) have exceeded contributions and the NIB has been seeking an increase of the retirement age from 60 to 65 and a rate increase.
This was reported on Friday as the Joint Select Committee (JSC) on finance and legal affairs met with officials of the NIB and the Finance Ministry at the Parliament building, Port of Spain.
NIB Executive Director Niala Persad-Poliah said the 9th actuarial review projected in 2013 expenditure would exceed contribution income and by 2019 expenditure would exceed contribution income plus investment income.
"The trend that we have seen since 2013 is that our contribution income is no longer sufficient to cover the benefit expenditure and we have been utilising investment income."
She reported for the financial year ended June 30, 2017 NIB used about $700 million of investment income to support benefit payments and for the next financial year NIB would have to utilise about $1.2 billion. She said on an annual basis NIB receives about $4.6 billion and pays out $4.7 billion and projected for this financial year ended June 30, 2018 NIB will pay out $4.7 or $4.8 billion which would be about $200 million short.
National Insurance Board Chairman Jacqueline Quamina said this country, like many other nations in the world, has an increased life expectancy and a shrinking workforce due to largely fertility and migration. She reported the NIB would be recommending through the finance minister the retirement age to be gradually increased from 60 to 65 from 2025 which would allow people already planning for their retirement to do so. Quamina said this country was lagging far behind on increasing the retirement age compared to many Caribbean counterparts and the UK.
She said the NIB would also be recommending a rate increase from 13.2 per cent to 15.6 per cent. She added the NIB planned to ramp up its public education programme and explain the rationale for the changes.