NIB seeks to implement new measures

The implementation of long-term reform recommendations in the ninth actuarial review report to deal with the National Insurance Board’s total expenditure, which is projected to exceed its contributions and investment income by 2019-2020, is “urgently needed” says Minister in the Ministry of Finance Allyson West.

These recommendations include “future contribution rate increases, restraint in future benefit increases and an increase in the retirement age for an unreduced pension from age 60 to 65 over a 35-year period from 2015 to 2060,” West told the Senate yesterday.

“These major reforms,” she said, “require considerable public sensitisation and national dialogue to be successfully implemented.”

West’s comments were in response a question about what urgent steps Government was taking to address NIS’s projected expenditure exceeding its income.

Even though the NIB implemented the “two most important short-term” recommendations which impacted positively in the short term, West said, recent macro-economic conditions have negatively affected the NIB and offset these gains.

The recommendations were an increase on the contribution rates from 12 per cent to 13.2 per cent, and an increase in the maximum insurance earnings from $12,000 to $13,600. They were effective from September 5, 2016.

The NIB, she said, has taken proactive steps to initiate consultations on the long-term reform measures.

Along with discussions, West said, the NIB was also improving aspects of its operations in an effort to control costs and bolster its revenues from contributions and investment income.

In relation to costs, she said, the NIB has maintained one of the lowest ratios of administrative expenditure to contribution income of social insurance systems in the English-speaking Caribbean, and it continues to review processes and technology to reduce the ratio. The ratio is 5.3 per cent for fiscal 2016 and within the established 7.5 per cent limit.

NIB has also reviewed its compliance structure to better monitor employers’ obligations.