MYLES Laroda, Minister of State with responsibility for the National Insurance Board.
By LEANDRA ROLLE
Tribune Staff Reporter
lrolle@tribunemedia.net
MYLES Laroda, Minister of State with responsibility for the National Insurance Board, said yesterday the government will have to make a decision next year concerning the state of NIB’s fund, which he says remains on target to lose about $70m this year.
In the meantime, he said the government will continue considering its options on how it can ensure the fund’s sustainability.
These options include cutting back on costs or raising revenue or doing both, he added.
“The fund is no better, or no worse than the last time we spoke,” Mr Laroda told reporters when asked for an update on the agency’s financial position before yesterday’s Cabinet meeting.
“The government is going to have to make a decision in the upcoming year as to what its position is going to be as we move forward as it relates to the increase. I think the fund is on pace to lose around $70m plus this year, that’s about $6m a month.”
“And in the upcoming year, even though there’s no projected improvement in revenues, it’s still not gonna make up that black hole so notwithstanding the economy just opening up and businesses may be doing a bit better, there is still tough times in our community, but that decision will have to be made and it’s being considered.
“We just don’t have a date yet for informing the public on what the decision is going to be.”
The Tribune has previously reported about the dire straits of the fund over the years.
Most recently, this newspaper exclusively reported in April that the 11th actuarial review of the National Insurance Board predicted the fund could be depleted by 2028.
That report had reduced the fund’s potential depletion timeline by one year, as the 10th review had made a prediction of 2029.
It also recommended NIB to increase the contribution rate by two percent and continue increases every two years until 2036.
Yesterday, Mr Laroda reiterated that the report’s findings will play a big factor in the government’s decision regarding NIB.
“The 11th actuarial report in repeating the other actuarial report is stating the dire state of the fund, which is predicted to run out in about six years and so that has to be heavily on the government with regards to making this decision,” he continued.
“If there is a collapse of it, those funds for people who would have paid in for 40 years, those funds will have to come from somewhere, some form of tax revenue. So, hopefully we have this matter resolved in the not-too-distant future.”
The current state of the fund has led some observers to believe that the government plans to increase NIB contribution rates next year, especially considering the increase of the national minimum wage.
Asked about this yesterday, Mr Laroda could not say, only telling reporters that a decision would have to be made by the government.
“Either we’re going to cut costs or we’re going to raise revenue or a combination of both,” he added. “And so, I can’t see the government at this time reducing the amount of benefits, but again, that’s just not my decision to make. That’s one for the full government to make and hopefully that will come shortly.”
After COVID hit in 2020, NIB paid out more than $100m in unemployment benefits to support thousands of Bahamians who were laid off during the health crisis.
Once NIB’s 13 weeks of payments stopped, the government introduced its own COVID unemployment programme to provide further income support to jobless Bahamians.
More than $200m was spent on the unemployment benefit scheme by the government at end-September 2021.
The number of benefits paid out over the years has left NIB reserves in a state of decline.
This is because payments have exceeded the incoming contributions since 2016, NIB had previously said.
Comments
KapunkleUp 1 year, 4 months ago
The article left out the blatant fact of how much the NIB fund has in IOUs - hundreds of millions of dollars owed by other government agencies/companies. So yet again, instead of cleaning house and repaying its debts, government is going to make the people pay more. It's better in the Bahamas.
moncurcool 1 year, 4 months ago
Spot on.
Which clearly means all options are not on the table. Government needs to start with itself first and pay what it owes to the fund before doing what they always like to do - tax the people
bahamian242 1 year, 4 months ago
Yes, and what about all the shares that are held in the Public companies where the COB & top executives receive big fat salaries and bonus??? No dividends paid out, like Commonwealth Brewery???
BMW 1 year, 4 months ago
Government needs to keep their money grubbing hands out of NIB, pay back what they owe and leave it alone !!!!!!!!!!
BMW 1 year, 4 months ago
I have been paying into NIB since its inception and I sure as hell want to be able to recieve my due in the next couple of years, Yinna keep your paws out of NIB and pay what you owe!!
KapunkleUp 1 year, 4 months ago
To put NIB into proper perspective... According to 2019 NIB financial statements, NIB has over 1.4 BILLION dollars in "Investments". How can government talk about fund depletion and income short comings with those numbers? Absolutely disgusting. Here is the link to NIB 2019 financials https://www.nib-bahamas.com/UserFiles...">https://www.nib-bahamas.com/UserFiles...
themessenger 1 year, 4 months ago
Successive governments have milked NIB unmercifully since its inception, how about they divest themselves of all the useless SOE's. BPL, Bahamasair, ZNS, Water & Sewerage, just to name a few, assuming they can find buyers, and put those millions worth of subsidies into NIB instead. In other words, give us the people, back the money you tief from our pension funds including interest.
Reality_Check 1 year, 4 months ago
The corrupt political ruling class will never cut costs by laying off any of the nonproductive staff at NIB which has one of the most costly and grossly over-bloated payrolls of any government run enterprise in our nation. They will instead significantly reduce the level of benefits paid to retirees while greatly increasing the level of contributions required from employers and employees. Then they will be in a position to have NIB hire even more of their loyal supporters.
Make no mistake about it, the corrupt political ruling class has for decades violated their sacred fiduciary duty and responsibility to ensure NIB prudently invested the contributions taken from honest and hardworking employers and employees.
Bottom line: Past and present members of the corrupt political ruling class have effectively bankrupted NIB by allowing waste, fraud and corruption to bleed NIB dry as a means of buying votes and unjustly enriching themselves and their cronies. And they now want to take even more of our hard earned money to refill the empty coffers of the bankrupt corpse of NIB so that they can fritter away even more of the people's life blood. Truly pathetic by every measure of cruelty.
Sickened 1 year, 4 months ago
The keepers of our money should be flayed in parliament. They have no self-respect and have no idea what it means to be the custodian of other people's money. They all deserve the most severe cut ass ever given to any human.
rosiepi 1 year, 4 months ago
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TalRussell 1 year, 4 months ago
For the past two months my sensory organ that detect it is directly connected to me Home Baked Brownies brain was smelling lots more** than just me specialty laced Brownies.
But keep watch was nearing for the moving-on-up by The Revolution with Talk Radio Presenter, Journalist Comrade Juan Carlos "Mr. Carmichael" doing his thing**
"Mr. Carmichael" doing his thing - Tis now a stated fact?
Time returns to the airwaves of Comrade Sparky and moves on up to the Guardian's Comrade "Sister" Paige McCartney, — Yes?
hrysippus 1 year, 4 months ago
This national insurance board, ... . .Lends out more than it can afford,. ... Propping up a failing bank, ... ... ... .Like climbing on the Titanic as it sank...... .... ..Or lending monies to Bahamasair.......That disappears like my receding hair...... .... ...And paying their staff more than they need,............ . . ..And plenty unemployed to feed........ .. . Forty nine years of mismanagement... .. ...
..They have wasted most that we contributors lent........Sigh.
stillwaters 1 year, 4 months ago
Exactly..... total summary of the NIB fiasco
TalRussell 1 year, 4 months ago
A State recognized funeral for Andrew “Dud” Maynard will be held in as much contempt right alongside that of the finances National Insurance Board.(NIB).
Goin' takes not one but two them St Agnes Anglican Church services to say all needs sayin' and everything else like this and that shouldn't be said** before sendin' off the two.
A good 2023 start would be for the PopoulacesPurse to bill the political party of the premiership of Phillip "Brave" Davis for all "Dud's State funeral staging costs,** ― Yes?
hrysippus 1 year, 4 months ago
Tellrussel; well, yes and no. yes?
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