Tancoo to address NIB in his budget presentation

MINISTER of Finance Davendranath Tancoo promised to speak about the state of the National Insurance Scheme (NIS) run by the National Insurance Board (NIB) in his upcoming national budget presentation, expected to take place in October.

He spoke to Newsday on September 25, the day after Newsday had published a story citing the 11th Actuarial Report on the NIB.

The report suggested that without intervention, the NIS fund is unsustainable, with assets due to be exhausted by 2033-2034, due to an ageing population profile.

The report noted a 3.2 per cent decline in contributors (workers) to the fund coupled with a 1.0 per cent increase in claimants (retirees)

In 2010, some 43 workers contributed for every ten claimants but a decade later there were only 27 workers per ten claimants.

While retirees were funded in 2010 by nine cents in every dollar in salary paid to workers, a decade later this had grown to 16 cents per dollar.

This trend was predicted by the 7th actuarial report in 2005.

Tancoo said, "That matter will be addressed in the budget."

Newsday asked if he was optimistic about the future.

He said, "I am confident that we have identified the problem. The problem has been existing quite a while and there are proposed solutions.

"We have identified the problem. The problems have been known for a while. Several of the audit reports have been presented.

"The budget for fiscal 2026 will include consideration for addressing some of those issues."

The 2020 actuarial report recommended raising the size of deductions from employees to make the fund sustainable. It also suggested raising the retirement age and for anyone retiring before that age to lose six per cent for each year for which they retired before age 65.

The report recommended bringing self-employed workers into the NIS system. It urged an elimination of the current dual coverage or double compensation paid to workers for workplace accidents.

Newsday was unable to contact former finance minister Vishnu Dhanpaul for a comment on the state of the NIB.

However his predecessor Colm Imbert had given an update to the House of Representatives on November 22, 2024.

He said for the year ended in June 2024 the NIB had collected a total contribution income of $4.748 billion, while paying out $6.5 billion to beneficiaries, which Newsday calculates to be a deficit of about $1.8 billion. Imbert had noted a 3.49 per cent rise in long-term beneficiaries, up to 202,608 people that year from 195,859 people the year before.