Home' Trinidad and Tobago Guardian : August 3rd 2014 Contents AUGUST 3 • 2014 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
COVER STORY | SBG5
mentioned in the actuarial review, Gopaul
said the institution was at a place where its
ratio of assets to debt was 1:1, but there was
still work to be done.
"We have made headway but I won't say
that we've recovered because things could
shift in the market, and you could lose value."
Any such shift could be eroded in ninth
actuarial review, the figures of which are being
compiled, for the end of the stipulated five
year period in 2015.
"Based on the fact that we have a lot in
equities, RBC did well, Republic Bank did well,
Neal and Massy (the group has recently under-
gone a rebrand) did well. Those companies
did well. That is why we are looking good
now. We are now extracting the data and then
the actuaries will crunch their numbers and
then we will see."
Rajkumar emphasised the point, "if it revers-
es this year, then we are back to where we
were two years ago."
Currently, local and foreign equities make
up 42.1 per cent of the NIB's investment port-
NIB has shares in 12 local companies, while
foreign managers handle the foreign stocks.
The allocation changes monthly.
Giving a further breakdown, Rajkumar said
the portfolio divided into four other categories
in addition to equities, They are: fixed income,
26.05 per cent; real estate, 0.85 per cent;
mutual funds, 3.65 per cent and cash and cash
equivalents, 24.6 per cent.
He also did not see the reliance on equities
continuing over the mid to long range.
"As interest rates start to rise, you would
see a pull back on the equities side, as funds
flow back into the bonds market," he said.
Gopaul also said the NIB intends to continue
adding to its real estate acquisitions as a long-
term diversification strategy.
Both also expect that a merger between
T&T Mortgage Finance and the Home Mort-
gage Bank will result in increased value for
the NIB's investment portfolio, as the value
of the combined entity is expected to be sig-
nificantly more than its separate parts.
When it is finally approved by Cabinet, the
new entity will be called the T&T Mortgage
But, will all of this be enough to stay ahead
According to the NIB, its benefits are
increased to reflect changes in the consumer
price index (CPI). The actuarial review deter-
mined that the increase in CPI over the 2005
to 2010 period was 52.3 per cent. Meanwhile,
from February 1, 2012, NI pensions increased
by 50 per cent to $3,000 and on March 4,
2013 through to 2014, most of the remaining
of NIB benefits, such maternity, funeral, sur-
vivor's, death, invalidity and injury, went up
by between 45 and 50 per cent.
Currently, therefore, benefits, at 95 per cent
of the CPI are almost keeping a pace of infla-
Gopaul said the NIB is also guided by the
stipulations of the ILO Convention: C102.
Under C102, a national pension operator is
obligated to provide the service in "a manner
which avoids hardship to persons of small
means and takes into account the economic
situation of the member and of the classes of
Defined benefit vs defined
The executive director said other shifts were
being considered to ensure the long-term sus-
tainability of the NI system. The guiding phi-
losophy behind the national pensions in T&T
has always been to "ensure that people with
a reasonable standard of living when they
reached old age," said Gopaul.
Expressing a personal opinion, she said that
it may be "difficult" for some people to provide
a pension on their own, or they may not be
as "savvy" to monitor investments to provide
themselves with pension income.
"Here you have a system that guarantees
you a benefit, because it is a defined benefit
system, once you meet the qualifying criteria.
Because you can contribute, year after year
after year, and you can earn a reasonable
replacement rate for your funds."
Gopaul admitted that during the last actu-
arial review, the possibility of introducing a
defined contribution element to the NI system
was considered---and shelved---at least for now.
"We want to keep the defined benefits. We
want people to be safe and comfortable. When
we look at what is going on in T&T, the fact
that we have so many insurance companies
and banks offering these facilities, we didn't
think we would be able to get into the market.
We already had this strong, established group
of organisations. However, we kept looking.
Every time we do a review, we look to see
what we need to change and how to change
One of the changes is how the NIB interfaces
with its public.
A new initiative, "Pension Ready," is seeking
to solve the age-old problem of citizens taking
years to access the pension benefit.
Before a Joint Select Committee in January
2014, chairman, Adrian Bharath, said there
were 800 matters before the NIB's appeal tri-
bunal and hundreds of matters backlogged.
Gopaul explained that these issue stretched
back to 1972, when the NI system was first
"There was some resistance to the system,
initially, and some of the older records are not
that good. So if you are someone who started
work from 1972, or were working when the
system started, you may have some incomplete
records. Since it was a new system, there would
be issues on what to do, how to get it right."
Gopaul also said incorrect filing of infor-
mation on the part of the employer or employ-
ee could significantly delay payment.
Pension Ready is targeted to people 55 years
The key is to make sure that people are
checking on the accuracy of their contribution
record years before they are due for retirement.
This way, any mistakes could be cleared up
years ahead of time and the pre-retiree is able
to check their level of contributions to see if
According to Gopaul, it takes 14 ½ years
of continuous work for monthly workers to
make the 750 contributions that would entitle
them to a pension. For daily and fortnightly
paid, it could be as many as 20 continuous
Those who want to use the Pension Ready
service are asked to fill out a pension ready
form available at NIB offices and its Web site.
Applicants are to provide one valid form of
ID as well as their electronic birth certificate.
Applicants will receive a package containing
a statement of their NIS contribution history
as well as other critical information for they
will have to verify. When these are at variance
with records, the applicant will be able to sub-
mit to the NIB any employment related doc-
umentation in postage-paid, self-addressed
envelopes included in the package.
The NIB also had several Pension Ready
caravans at locations across T&T.
Are you Pension Ready?
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