The Tribune

IT seems like everything is going up.

An overheard conversation this week probably reflects the thoughts many are having across the country.

The person was listing off the price increases at present. “Gas prices up,” he said. “Food prices up, bills going up, even plane tickets up not that we can afford to go anywhere, and now they’re talking about putting NIB up?”

You’ve perhaps heard the same refrain as people try to figure out how to pay their bills and fill their food cupboards. You perhaps have said the same words yourself.

For NIB, it’s no surprise that the fund has taken a beating over the economic crash brought on by COVID. It’s a simple equation – fewer people at work with so many furloughed or losing their jobs entirely so that means the contributions have dropped, while so many more people in need of help to get them through the long months of COVID restrictions.

That the lifetime of the fund has dropped by a year then is not a shock, although it is a reminder of the long-standing concern of how our national insurance fund is maintained.

The current minister of state with responsibility for the fund is Myles Laroda, who said yesterday: “The reality is the National Insurance Board has been running deficit for the past six years so this pre-dated COVID. This can was kicked down the road too many times.”

Mr Laroda is not wrong about that can kicking. In fact, in the actuarial report filed in 2002, the prediction was that the fund would be bankrupt by 2030. As FNM chairman Dr Duane Sands said yesterday as he cautioned against using the money as a slush fund: “Now we are hearing 2029/2028. I don’t think we have broken much new ground.”

Sir Franklyn Wilson yesterday warned of the consequences of kicking that can any further. He said: “The question about kicking the can down the road is an absolutely true statement. I’ve heard that said by at least one prior minister at NIB. Successive ministers have run that entity in a way that raises questions about the level of payroll, the number of people, the investment policy…

“We cannot let NIB go broke. The pensioners, all the people that depend on that, that’s something we don’t want to imagine.”

So we can’t let it go broke, and we shouldn’t use it as a slush fund – and we need to fill it back up. Again, that’s a simple equation – stop taking money out of it and start putting money back into it. And if it won’t refill on its own as people get back to the workplace, we’ve got to pay more. All that’s left is timing.

A number of businesses are already talking about reeling from so many financial costs – and we don’t want unemployment to spike as that won’t help either. So when do you raise it, and by how much? And what reform goes with it?

Larry Gibson, the chief operating officer of CG Atlantic Pensions, is already warning that without reform we will be faced with contribution hikes “every three to four years.”

It is a big task to rescue our nation’s pension pot – and simply sticking up the prices on its own is not going to help.

Mr Laroda speculated yesterday that in terms of rate increases it “is not just going to be one. You can expect numerous increases”.

These are the consequences of not rescuing the fund in better times, and having to do so in the middle of an economic crunch.

Will Prime Minister Philip “Brave” Davis be the one to take the reins and steer the fund to safety? We shall see.

Credit, though, to the person who compiled that report all the way back in 2002, that has turned out to be so accurate.

Interestingly, the minister with responsibility for NIB that he handed it to at the time is a familiar face. It was Brave Davis.

That can kicked all the way down the years has ended up at his feet once more.