By YOURI KEMP
Tribune Business Reporter
ykemp@tribunemedia.net
A Cabinet minister said reserves at the National Insurance Board (NIB) are forecasted to “decline sharply” in the next few years and called for a contribution rate increase of 2 percent.
Myles Laroda, State Minister with responsibility for NIB, said during the budget debate on Thursday that the board had increased its revenues by $25m as the economy began to grow and recover from the COVID-19 pandemic economic shutdown.
He also said: “The road to recovery continues. And if we are able to keep our economy open, we expect 2022 revenue to be just short of pre-pandemic levels. The realisation of this is highly dependent on the COVID 19.”
COVID-19 put a $150m dent in the board’s funds in 2020 due to unemployment assistance, but it still has assets of $1.5bn. Mr Laroda warned, however, that reserves are expected to “decline sharply” in the next few years.
Urging for reforms at NIB, Mr Laroda said that one of the key reforms that must take place at the board is an “increase to the contribution rate.”
This increase would allow for the board to increase revenue to head off any severe weakening of its reserves. However, the government has decided that it “will not visit” an increase in the contribution rate until more workers are put on the payroll and the private sector is able to absorb the increase.
The number of people paying into the contribution scheme is decreasing with the number of people being paid out of the fund increasing, thus an increase in the rate of 1.5 percent to 2 percent of the current rate is necessary. “With subsequent increases every two years for a period is being considered. NIB is 8.8 percent contribution rate has remained unchanged since the inception of the NIB programme in 1974. With the first and only increase of 1 percent being made in 2010 with the inclusion of the unemployment benefit,” Mr Laroda added.
Mr Laroda also said: “Demographic trends in the 11th actuarial report indicate low fertility and mortality rates with steady migration. In a Social Security system, where contributors and employees pay to the fund’s pension benefits women having fewer children coupled with an aging population means that there are less individuals to meet the benefit demands of the scheme.”
Comments
sheeprunner12 1 year, 10 months ago
So, what is LaRoda & dem gonna do???
Fix it .........
bahamianson 1 year, 10 months ago
So , can we tell you respectfully what to do with yourself? Everything government opens its mouth , It is about tax hikes. You people do not know what the he'll you are doing. A damn fool can say, increase tax, but it takes people whom know what they are doing to be in government.
JokeyJack 1 year, 10 months ago
Yep, and we never are informed where the money ACTUALLY goes. We get a budget, but anyone can make a budget to say anything. In fact on my personal budget i have itemized a one million dollar donation to the local library, pending a revenue increase LOL.
tribanon 1 year, 10 months ago
The very cruel Davis at the urging of squirming LaRoda wants hard working honest Bahamians to flush more of their increasingly scarce money down the National Insurance Fund toilet bowel when he knows full well that NIB is nothing but a corruptly run and most wastefully managed Ponzi scheme which will never be able to make good on its obligations to those employers and employees who have paid many thousands of dollars into it over many years.
Both cruel Davis and squirming LaRoda need to be told in no uncertain terms by employers and employees alike that enough is enough. If they sincerely want to try improve the financial condition of the National Insurance Fund, then let them first demonstrate that on a good faith basis by slashing the over-bloated and very costly headcount of NIB by at least 50%. NIB's annual administration costs are more than three times what they should be compared to national social insurance schemes in many other countries.
It's generally known that our National Insurance Fund has been run into the ground and bankrupted for all intents and purposes by decades of bad and fraudulent investments made at the behest of the corrupt ruling political elite. And now these same corrupt people have the temerity and naked gall to call on poor struggling employers and employees to put even more of their hard earned money into a scheme destined not to be able to make good on its obligations when all is said and done. Talk about Davis being cruel to the n'th degree!
The_Oracle 1 year, 10 months ago
A lifetime of Tithing, as we knew the Government run Ponzi scheme wouldn't make it. Oh but they are our heroes right?
John 1 year, 10 months ago
NIB needs to explain why many Bahamians haven’t received a red cent during the pandemic. Some have been making contributions for decades but these heartless workers at NIB found flimsy excuses tot to pay them a dime.
. . Then there are the self employed people. Many owned and operated small businesses like car washes, lawn care, plumbing electrical and air conditioning business barbers, beauty saloons, clothing and shoe stores. ALL were closed during the pandemic by orders of the competent authority. And , according to NIB, NONE of these people qualified for unemployment from NIB because they were self employed. Self employed yes, but banned from working by the same authority that banned employed workers during the same pandemic. The rules and rationale behind some decisions in this country are beyond mind boggling. Employed and self employed people work for the same purpose. To earn an income. So not only did self employed persons suffer the financial loss of having their businesses closed during the pandemic but they suffered the loss of not being compensated in the least for loss of personal income.
Maximilianotto 1 year, 10 months ago
$1,7 bn NIB reserves pilfered over decades. NIB is bankrupt. Laroda knows.
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