Myles Laroda, the state minister with responsibility for NIB.
By KHRISNA RUSSELL
Tribune Chief Reporter
krussell@tribunemedia.net
A NEW actuarial review of the National Insurance Board has predicted that the fund could be depleted by 2028 should officials neglect to take urgent action.
The 11th report of its kind, received by the Davis administration roughly three weeks ago, reduced the fund’s potential depletion timeline by one year, as the 10th review had made a prediction of 2029.
Myles Laroda, the state minister with responsibility for NIB, made the revelation yesterday, telling The Tribune he was of the view that the situation persisted as the board had run deficits for nearly six years.
It is also likely that the situation was compounded by the COVID-19 pandemic.
The Tribune has not seen the report, with the minister directing this newspaper to NIB. However, its Chairman Philip McKenzie could not be reached, while a public relations official said the report had not yet been released.
However, Mr Laroda raised the shocking development as he made a case for the board’s tight financial position as it hopes to avoid industrial action by the Public Managers Union, which held a strike vote last week.
While the final results are unclear, PMU president Cassandra Lewis told The Tribune last week that a majority of union members voted in favour of striking.
With NIB’s actuarial review giving undesirable findings, Mr Laroda said he was hopeful that the union would accept a new offer the board made in response to their grievances.
The union has been wrangling with NIB for a new agreement for 29 months, according to Mrs Lewis last week. Recently the union pinpointed the hiring of an inordinate number of people at the board since the Davis administration took office.
Mr Laroda said: “The PMU president has every right to represent her members’ interests, but the reality is that out of the last 29 months, the Davis administration is just going on seven months to date. So, if my math is correct the former government had three times as much time as we had and they didn’t get a resolution and so I will let the public come to their own conclusion as to whether the same energy matches what was given to the former administration.
“We have been given the 11th actuarial report that suggests that unless urgent action is taken, the fund can be depleted by 2028.
“So, we are taking a look at the whole picture and we have to take a holistic approach with the NIB and the way forward, which includes the remuneration of staff.
“The 10th report predicted the fund would be exhausted in 2029 if emergency measures weren’t taken.”
Asked whether the volume of assistance paid out by NIB during the COVID-19 pandemic contributed to the review’s findings, Mr Laroda said: “Before COVID, NIB was running deficits from 2016, so five going on six years of running deficits.
“NIB does not get a subvention from the government so it relies on contributions and investments. I don’t know how many businesses will stay afloat year after year after year under those circumstances.
“We have an ageing population and low fertility rate among other things. A few decades ago you were talking about benefits of $12m. Now we are talking about north of $100m a year that’s just unsustainable.”
At the peak of the COVID-19 pandemic, NIB administered unemployment assistance to 22,000 people.
That number has now decreased to around 8,000.
The last estimate on how much was spent on the unemployment benefit scheme was $263m at June 2021.
NIB also absorbed an additional $6.5m in social assistance costs to help finance a $500 lump sum payment to persons still on unemployment assistance last year.
Comments
bahamianson 2 years, 1 month ago
NIB seems to be a PONZI Scheme. only the first in gets all, the other investors get screwed. this is just more good news on everything increasing including food cost and gas prices. The Bahamas is nothing but good news. Everyday there is bad news , everyday. we need people whom know how to run a country . Bring in the foreigners to help us manage our resources better because we are doing a piss poor job! I know, let's increase real property tax on the people already paying it. After all , everyone needs to pay "their fare share". How ridiculous!!!
Sickened 2 years, 1 month ago
NIB broke again! I am guessing they also invested in the $70million baseball stadium that will never be used. Another useless, overstaffed government slush fund.
moncurcool 2 years, 1 month ago
NIB is the biggest mafia scheme around. People put in their hard earned money in and they have to audacity to say it is going broke? Of course it is broke when people who don't put in anything can get money out, the government always taking the money to build all kinds of buildings and what are the returns?
Obviously the only reason the Minister is mentioning this is because they want to raise the amount people who putting in will have to put in, only to discover they will not get out what they even put in. Maybe we need to defund NIB.
Proguing 2 years, 1 month ago
This is how they communicate the next NIB contributions increases. Your paycheck is about to shrink again...
KapunkleUp 2 years, 1 month ago
NIB ain't broke. NIB holds hundreds of millions of dollars of IOUs from the government, according to the last financial report of 2017. Of course one wonders why a PUBLIC corporation's last financials are 5 years old. https://nib-bahamas.com/Publications">https://nib-bahamas.com/Publications
GodSpeed 2 years, 1 month ago
Time to borrow more money. I doubt the US dollar, or Bahamian dollar will exist 20 years from now.
realfreethinker 2 years, 1 month ago
Bitch better have my money
sheeprunner12 2 years, 1 month ago
Successive governments used NIB as a cash cow. The chickens are coming home to roost.
No time to holler now
Fix it Brave One 🙄🙄🙄
hrysippus 2 years, 1 month 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...
The_Oracle 2 years, 1 month ago
N.I.B. is a Ponzi scheme by definition, with Government playing the roll of Madoff. The day it was created we all knew it would not be there for the Citizens in the future, confirmed when Government amended the legislation to allow them to "borrow" the peoples money a few years later.
stillwaters 2 years, 1 month ago
Most of the huge amounts of money made by NIB for the past 40-50 years was from the hard -working, job -keeping baby-boomers. Most of them are retiring now/ have retired, so the bottom is dropping out....plus politicians using the money how they feel like certainly added to the depletion.
realitycheck242 2 years, 1 month ago
Three quarters of NIB Investments is in worthless government registered stock. Thats money the cash strapped government cannot pay back. Add to that the hundreds of millions of dollars they payed out in Covid 19 unemployment assistances Bad investments in building many no income producing buildings for governments departments, clinics, the police, customs Min of health and the min of education, But the elephant in the room is the huge administrative cost for their over payed staff who have come to expect hugh salary increases every time a union agreement comes up for negotiaions. and the hiring practices of many successive administrations to fix up their lazy families members, sweet hearts and political croonies SMT
sheeprunner12 2 years, 1 month ago
You hit it on the head ....... We await the spin that the Brave One will put on this revelation by LaRoda
Funny how the FNM cannot rebuff this ..... They are co-conspirators in NIB fiscal decline.
If this revelation is true, ALL Bahamians should be outraged by the political betrayal of successive governments for their own selfish motives by misusing NIB funds
John 2 years, 1 month ago
Firstly NIB still operates in the dark ages. While there have been some improvements, NIB needs to embrace more technology to make its operations more efficient and less dependent on Human Resources. Secondly, many of the larger businesses are not paying NIB contributions and/or they are so far behind in contributions it puts a drag on NIB operations. Thirdly, when minimum wage was raised over a decade ago that increase affected sixty percent of tge work force. So sixty percent of NIB contributions were increased by sixty percent. Government plans to increase minimum wage by at least Twenty Percent in the next few months. So sixty percent of contributors to NIB will see their contributions automatically increase by 20 percent. And, of course the increase in minimum wage will also drive up other wages which will also cause their contributions to increase. And with the pandemic coming to an end and people going back to work, there should be an overall increase in contributions and a corresponding decrease in pay-outs. And as NIB discontinued its ‘non-contributor pension and benefits plans’ this should also decrease its payouts. But how profitable are NIB’s investments? Are they too risky and are too many of them not generating any returns or insufficient returns? If government can go after the small businesses and struggling individuals for unpaid taxes, It must also live up to its obligations to NIB. To allow NIB to collapse will be a total disaster and a disservice to the Bahamian people.
bcitizen 2 years, 1 month ago
NIB has become nothing more than a basic income tax. Call it what it is. Government just takes the money and invests it in non performing government programs and buildings. How much more do they think individuals and business can take? The business pays about 2/3 of the NIB contributions and the employee about 1/3. Remember when Minnis first became PM and that video of him touring the NIB office? How many people they got working in that place? They had people inside broom closets sitting at a desk.
SP 2 years, 1 month ago
Translation.............. NIB taxes will be increased to compensate for the gross mismanagement and asinine stupidity of the PLP & FNM.
sheeprunner12 2 years, 1 month ago
Yep, VAT across the board, now NIB increase.
The poor ppl and most SMEs can't take no more
John 2 years, 1 month ago
When they increase NIB contributions on top of minimum wage being increased and causing contributions to be automatically increased, NIB will simply collect LESS contributions. The fact of the matter is the country consists of many small businesses that simply cannot afford to pay anymore TAXES. The country has a number of FOREIGN businesses, some who worked at Bah Mar, The Pointe, Albany and at the Container Port in Grand Bahama, for example. Many do not pay their NIB contributions, not even for their BAHAMIAN workers. Then they leave the country owing hundreds of thousands to NIB and millions in other unpaid bills. They get away Scott free! But NIB takes the small local, some mom and pop operated businesses to court. So NIB can’t ever improve its financial status if it only goes after the bread, but let the cheese get away every time. The same thing is happening with BPL and WSC and, to some extent BTC. Foreign companies that have no ties to this country must put up bonds to ensure that ALL their bills are PAID when they leave. Stop being hoodwinked and bamboozled by the shiny red tie and the leather briefcase.
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