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NIB will have to reform
or sell off assets
Please do not panic. This is the
plea from executive director of the
National Insurance Board (NIB)
Niala Persad-Poliah as she tried to
allay the fears of citizens following
recent revelations that if changes
are not made to this country’s na-
tional insurance system, funds will
be completely depleted by 2030.
The Ninth Actuarial Review of the
National Insurance System was pub-
lished in June 2015.
It covered the three-year period
up to June 30, 2013, and presented a
projection of the financial situation
of this country’s national insurance
system for the next 50 years.
“From 2019-2020, assets will rap-
idly decrease and the NIS funds will be
completely depleted in 2029-2030 if
nothing is modified in terms of con-
tributions or benefits,” the actuarial
Workers contributing to NIS have
been expressing concerns about their
However, Persad-Poliah sought to
assure the public that this was not
cause for concern as this country’s
national insurance system is “strong”.
Reform of the system is, however,
“There is no need for fear and panic
in the minds of citizens at this time.
The NIS is strong but reform is needed.
Contributors who are paying into the
system, those who are yet to receive
benefits and even those who are in
receipt of benefits should not be con-
cerned. But we must all recognise that
reforms are needed to the system so as
to preserve the fund for generations
The actuaries have sounded warn-
ings that urgent action is required to
update the system and ensure it is rel-
evant to the income security needs of
They projected that the number of
people at pensionable age in the coun-
try will grow to over 400,000 by 2063,
up from the current figure of 200,000.
The working population between 16
to 59 who supports the retirees through
their contributions will decrease by al-
most 25 per cent over the same period.
To address these issues among the
recommendations made in the review
is that the country’s retirement age be
increased to 65 and an increase in the
contributions made by citizens.
The three short-term changes rec-
ommended by the actuaries are an in-
crease of the maximum insurable earn-
ings (MIE) which is the band of income
of an insured person that is currently
insured from $12,000 to $13,600, an
increase in the contribution rate from
12 per cent to 13.2 per cent, and a freeze
in the $3,000 minimum pension.
The MIE has already been increased
and a gradual increase of the contri-
bution rate already began last year,
These two short-term measures
have pushed back the date of the
system being completely depleted by
six years to 2036, she said.
The long-term changes recom-
mended by the actuaries are an in-
crease in the retirement age gradually
from 60 to 65 over the period 2025 to
2060, a further increase in the contri-
bution rate to 22.8 per cent by 2061,
and the implementation of a mecha-
nism to automatically adjust system
parameters namely the minimum pen-
sion, the earned pension, the MIE and
the contribution rates.
NIB will have to reform
or sell off assets
Persad-Poliah said the time for re-
form was now. If not, the NIB may
need to start selling off its assets to
foot the bill, she said. The NIB’s as-
sets up to 2012 was $22 billion.
“The time for reform is now. The
system projects that we will need to
start selling assets by 2020 in order
to meet shortfalls between income
and benefit payments.
“Although we have assets to meet
shortfalls until 2030, any sizeable
sale of assets has the potential to dis-
rupt our fledgling securities markets
and we wish to avoid this.
“We therefore recommend that
further contribution rate increases
be considered in the near future,
the minimum pension continue to
be frozen, and the retirement age be
increased over time,” Persad-Poliah
According to the conclusion of the
actuarial review, the $3,000 mini-
mum pension from national insur-
ance is “too generous”.
Persad-Poliah said no recommen-
dation has been made to reduce this
“The minimum pension of $3,000
represents 115 per cent of the min-
imum wage. Internationally, the
norm for minimum pensions range
between 40 per cent-80 per cent of
“No recommendation has been
made to reduce this amount but it
is recommended that it be ‘frozen’
over time to ensure that it reverts to
its original intent of protecting the
most vulnerable retirees.
“This must also be viewed in the
context of cost. The contribution rate
now required to cover expenditure is
13.2 per cent versus approximately
8.5 per cent if only earned pensions
were paid,” Persad-Poliah said.
Persad-Poliah said the recommen-
dation to increase the pensionable
age over time to 65 would have a
negligible impact in the short term.
“Increasing the retirement age still
allows persons the option of retiring
at age 60 with a reduction in their
earned pension. This reduced pen-
sion will still be subject to the min-
imum of $3,000,” she said.
“The only persons who will be
immediately impacted are those
who qualify for pensions above the
minimum.” This currently stands at
three per cent of all retirees.
“Given this negligible impact in
the short term, we can even con-
sider a more aggressive timeline
for increasing the retirement age,”
The NIB is seeking the support of
all citizens to ensure that the rec-
ommendations are implemented and
she assured that everything will be
done above board and in a transpar-
“Please do not panic. We need the
support of all citizens, all stakehold-
ers—Government, business and la-
bour to make the changes. We wish
to also assure the public that the NIB
is well-managed, well-governed,
transparent and accountable. We
have shared with the public all the
recommendations before us for
consideration and will continue to
do so,” she said.
“Any changes being made to your
NIS will involve you and will be done
with your knowledge and with ad-
vanced notice,” Persad-Poliah said.
Over the last financial period, the
NIB collected $4.2 billion in contri-
bution income and paid out $4.5 bil-
lion in benefits.
“We must continue to place em-
phasis on our compliance efforts
aimed at maximizing our collections
and ensuring that what we collect is
wisely invested. We are also looking
toward technology to reduce oper-
ating costs, while at the same time,
enhancing our efforts at service and
ease of doing business with the NIB,”
The NIB’s financial statements for
the last three years have not been laid
in Parliament as yet and therefore are
not available to the public.
“The annual reports for 2013, 2014,
2015 and 2016 were all completed on
time and submitted to the Minister
of Finance to be laid in Parliament
within two months of his receipt in
accordance with the National Insur-
ance Act. All our statutory commit-
ments of reporting to the Minister of
Finance have consistently been met
over the years,” Persad-Poliah said.
“These documents can, howev-
er, only be made public when they
are laid in Parliament. We recog-
nise the need for these reports to be
made public and for the all citizens
to have access to these reports, and
will continue to work with the Min-
ister of Finance for these to be laid
in Parliament,” she said.
(See Pages A10, A11)
Executive Director of the National
Insurance Board Niala Persad-Poliah.
"Any changes being made
to your NIS will
involve you and will be
done with your
knowledge and with
ABOUT THE NIS
•This country’s national insur-
ance system was introduced in
•The system is financed by
contributions from employers
and employees and is designed
to cover employees against
events of age, invalidity, death,
sickness, maternity, occupational
accidents and injury.
•The number of contributors
to the system in 2016 was esti-
mated at over 516,000 people,
representing 80 per cent of this
country’s labour force.
•The NIS pension is currently
$3,000 and there are currently
155,000 beneficiaries, including
PNM: Local Govt reform one step closer
Local Government reform is
one step closer as the Govern-
ment has a policy paper and is
in discussions with the Chief
Parliamentary Council to bring
This was one of the issues dis-
cussed at the People’s National
Movement (PNM) general council
At a media briefing shortly after,
PNM MP Stuart Young said the
party expected to bring legislation
to Parliament between September
and December of this year.
“At government level we com-
pleted our consultation process.
The Government now has a pol-
icy coming out of those 14 public
consultations on local government
Young said the party’s general
council also discussed the rebuild-
ing of Balisier House. They are still
raising funds for construction. The
project will include constructing
a new building in the parking lot
of the property and refurbishing
the current structure.
He noted that party members
had used yesterday’s meeting to
pay respects to the late Rennie
Dumas, thanking his family and
Additionally, the party dis-
cussed the PNM’s Sports and
Family Day which will take place
on June 11.
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