The Minister of Labour and Social Security will be taking steps to ensure the long-term viability of the National Insurance Scheme (NIS).
Portfolio Minister, Hon. Shahine Robinson, said since 2007, the NIS has been paying out more for benefits than it has received from contributions, and the last actuarial report had projected that if action is not taken quickly, the cash flow will be negative by 2025 and depleted by 2033.
“This is the case even with the creditable performance of the National Insurance Fund (NIF), which, at the end of financial year 2016/2017, valued approximately $95 billion. It is, in fact, earnings from investments that have been used over the years to meet the gap in the contributions received relative to the payments for benefits,” Ms. Robinson pointed out.
The Minister, who was addressing the NIS’s 51st anniversary church service at the St. Ann Baptist Church in St. Ann recently, said it is, therefore, critical to the long-term viability of the scheme to identify the optimal mix of contribution rates and insurable wage ceiling that will pay for the benefits.
“The fact is that any increase in benefit rates requires support from an increase in the contribution rate and insurable wage ceiling. In essence, increases in the pension rates are married to increases in contributions,” she noted.
“The question then is, can pension rates be increased within the current contribution rate and insurable wage ceiling without adding further injury to the financial pillar of the fund?” she asked.
Ms. Robinson said it is, therefore, imperative that the NIS receive further guidance from the actuaries and conduct more frequent actuarial reviews in order to monitor the performance of the funds and make timely interventions. The next actuarial review will be conducted in this financial year.
Meanwhile, the Minister informed that by the end of March 2018, the NIS office will be fully equipped with computers in order to improve service delivery. She said that all members of staff will be provided with a computer.
“This should result in greater responsiveness. We are also developing new software for the NIS, to enable faster processing of applications for all benefits,” Ms. Robinson indicated.
She further informed that a staffing and operations review is under way, which is aimed at ensuring that the office has the right complement of staff with the requisite skills; and that there is a greater level of professionalism, and full alignment of operations and activities.