Home' Trinidad and Tobago Guardian : August 3rd 2014 Contents SBG4 COVER STORY
SUNDAY BUSINESS GUARDIAN www.guardian.co.tt AUGUST 3 • 2014
From 2015 to 2020, 127,000 peo-
ple between the ages of 55 to
59 will become eligible for pen-
sions under the National Insur-
ance (NI) system. This is in
addition to the 77,000 that are
already in receipt of the benefit. The National
Insurance Board (NIB)---which provided the
preceding figures---is aware that these are part
of a wider demographic shift which will see
the those receiving pensions from the state
burgeon while the numbers supporting this
aging population will decrease.
In it eighth actuarial review, published in
September 2012, the NIB projected that the
population of this country will grow from
1,317,714 (2010) to 1,431,642 by 2036, a per-
centage increase of 8.6 per cent. Thereafter,
it is expected to decline to 1,341,694 by 2060.
The review said, while those 60 and over will
number 412,423 in 2060, or 30 per cent of
the population, those between 16 and 59, who
form the support base of the NI system, will
decrease by 18 per cent to 712, 184, down from
871,487 in 2010.
The scheme s contribution income will also
be outstripped by its expenditure from the
year 2012. There was also a shortfall in assets
by $3.3 billion in financial year 2011-2012.
However, the review said NIB s assets will
continue to increase, but only until the year
Subsequently, the review forecasted that if
nothing was done, the NI system funds would
be completely depleted by 2039-40, a fact
confirmed by chairman, Adrian Bharath in an
April 2013 interview with the Business
The review proposed an increase in the rate
of contributions to cover short-term costs,
with calls for a long-term plan for instituting
the rate increases.
The public has already experienced the first
of these rates adjustments with contribution
rates moving from 11.4 per cent to 11.7 per
cent of insurable income in 2013 and a further
0.3 per cent to make it 12 per cent in 2014.
Bharath also said that he wanted to "increase
the institution s investment in property and
diversify its portfolio to include more foreign
investments. He also spoke about a "rebrand"
of the NIB, to make it more "transparent, open
and accountable to the public."
It has been more than a year since these
statements were made.
The Judges Salary and Pensions and the
Legislative Retiring Allowances bills, shelved
last week, have brought the issue of the ade-
quacy of pension coverage for the general
public back to the forefront.
Executive director of the National Insurance
Board, Karen Gopaul, and executive manager,
investments, Navin Rajkumar, sat down with
the Sunday BG to discuss where the organ-
isation is at with reaching the objectives as
set out by the chairman as well as how the
NIB intends to ensure the survivability of the
Not out of the woods yet
One of the first items it has been able to
accomplish on this list is to increase its level
of foreign investment.
Gopaul said last year, the NIB received per-
mission to increase its level of foreign invest-
ment from 10 to 20 per cent. Most of this has
been placed in equities. Gopaul said that in
addition to improving the diversity of the NIB s
portfolio, the move helps them get around the
problem of the low-interest environment for
fixed-income instruments locally.
In the last actuarial review, the actual long-
term rate of return was 4.4 per cent, Rajkumar
said that over the last financial year, the rate
of returns on both local and foreign equities
has aided the overall portfolio in achieving a
rate of return of 10 per cent thus far.
"If you look at the All Trinidad Index, this
increased by 17.7 per cent. The return on the
S&P 500 was 29.6. Given that the majority
of the portfolio resides in equities, it resulted
in an upswing in the portfolio."
However, the NIB s executive director does
not think they are out of the woods yet.
Referring to the $3.3 billion-shortfall assets
NIB planning for pension bomb
Real estate, foreign equity to shore up national insurance fund
Continued on Page 5
NIB staff register members
of the public for their
Pension Ready packages.
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