• JIS News

    Minister of Labour and Social Security, Hon. Pearnel Charles, has informed that a submission will be made to Cabinet soon on the proposed measures to increase the levels of contribution to the National Insurance Fund (NIF).
    Mr. Charles, who was making his contribution to the 2009/10 Sectoral Debate in the House of Representatives on June 23, said that one available option was to lift the National Insurance Scheme’s (NIS) insurable wage ceiling from its present level of $500,000, which would provide a net surplus to the Fund that can be invested for the benefit of NIS pensioners and contributors.
    He said that, currently, the NIF is paying out more in benefits than it is collecting from contributions. “In the last fiscal year (2008/2009), we collected $5.5 billion in contributions and paid out $8.5 billion in benefits, a net deficit of $3 billion. As a result, we have had to depend more on investment income to close the gap,” Mr. Charles informed.
    For fiscal year 2008/2009, the NIF earned net investment income of $5.25 billion and the total value of the Fund as of March 31, 2009, was $52.47 billion. “If the current trend continues, the actuaries project that the NIF could be completely eroded in 20 years,” the Minister told the House.
    In the meantime, he informed that the pension reform process will also address the disparity in the retirement age for males versus females, noting that the anomaly has persisted for too long, and must be corrected.
    “In many other jurisdictions across the world, the adjustment of the retirement age has been an integral part of their pension reform in light of the fact that people are living longer, and even more so our women,” Mr. Charles stated.
    He said that pending the recommendations of the actuary, “we intend to unify the retirement age for both men and women under the NIS at age 65. This is to ensure that persons are properly able to plan for their retirement. However, any upward adjustment of the retirement age must be implemented on a gradual basis.”
    The latest actuarial evaluation shows that by 2015, the number of pensioners is projected to be 121,000, and by 2035, it will be 200,000 persons.