By LETRE SWEETING
Tribune Staff Reporter
MYLES Laroda, state minister with responsibility for the National Insurance Board, yesterday continued to advocate for increased contributions for the agency’s fund to avoid an $98m loss this year.
In his contribution to Parliament yesterday Mr Laroda said he spoke to several former government officials that had responsibility for NIB for advice on the way forward.
Mr Laroda’s concerns come one month after he assured the public that the government has made a decision on the NIB fund and whether contribution rates will be increased or not. At the time, he declined to say what specific course of action the government intends to take to ensure the fund’s sustainability.
Yesterday, Mr Laroda gave some updates as to the current state of the fund, in comparison to years past.
“For the year ended December 2022, contributions totaled around $280m, while benefits expenditures total $355m, a shortfall, some $78m,” Mr Laroda said.
“Our reality is the National Insurance Board is projected to lose $98m this year, if there is not an increase, that’s almost $100m. That is the reality,” he said.
“Up until 2016, there were mostly surpluses. And then the year 2016, there was an income of $261,191,000 and an expenditure of $275,155,000. Since 2016, the National Insurance Board has not turned a profit,” Mr Laroda said.
“The NIB budget for 2023 has projected that benefits will exceed contributions by $86m and projects total income to be $358m, with total expenditures of $456m, resulting in a deficit of $98m. In a short time, the government will provide a way forward to benefit all Bahamians,” Mr Laroda said.
“In the interim, greater compliance among employers is the clarion call. For 2023, a goal to collect some $300m in contribution payments has been set with an expectation that the domestic economy will continue its reopening momentum, with the pandemic numbers and various restrictions seemingly in the rear view,” Mr Laroda said.
Mr Laroda added that Prime Minister Philip Davis charged him with finding innovative ways to increase the income for the agency, which cannot be subsidised by the government.
“(The) Prime Minister, the MP for Cat Island, Rum Cay and Salvador, charged myself and the board, being sensitive to an already tax burdened society, that we should find innovative ways in which we can increase income,” he said.
“Some $16m was invested with a private Bahamian company in the space of three months would have revealed a profit of some $2m. By any count, that’s innovative. But we would notice that even if we replicate that four times, we’re looking at $8m. We are not going to make up that shortfall,” Mr Laroda said.
“The Prime Minister also would have charged me with speaking to individuals who would have had experience of National Insurance. He wanted bipartisan input from various individuals,” he said.
“Mr Anton Saunders, we all know that he’s a former employee and chairman, he’s in the insurance industry. And he has given me permission to go on the record to say that yes, there needs to be a unified approach to this but he also recognises that while he was chairman, that those discussions were being held,” Mr Laroda said.
“I then spoke to Mr Patrick Ward, another former chairman, who has also given me permission to call his name with regards to the need for rate increase and other recommendations to better put NIB in a position to be that safety net for individuals who would have paid into the programme and at their retirement age to be able to receive their benefits,” Mr Laroda said.
Mr Laroda encouraged the Bahamian public to get to know their NIB status to fulfil their responsibilities as citizens and to be knowledgeable of contributions made for them.
In addition, Mr Laroda also mentioned that the National Emergency and Management Agency (NEMA) and the Disaster Reconstruction Authority (DRA) will be merging into one authority “to reduce the duplication of positions and also responsibilities”.
Mr Laroda said the newly merged agency should be open by July of this year.