There were some disconcerting sentiments coming out of last weekend’s Fortress Fund Managers annual investment forum. Enough to jolt us from our complacency and demand if only but quiet and constructive attention.
The concern expressed was that National Insurance Scheme claims –– for all the surplus the fund now boasts –– could outstrip contributions within nine years, and that if there is no re-evaluation of the NIS’ modus operandi, within another 20 years after there could be no NIS at all. By 2050 the fund could have dried up altogether.
It is no pretty picture painted by Fortress’ pension director Rene Delmas, and if he had his own way it would not stand; it would not make it to the gallery. Actually, in fiery tone, Mr Delmas has declared that he will not sit back and do nothing; for he is of the view the fund needs to be rescued. It must be saved from the Government, he argues, which is using it as a cash cow.
It won’t be the first time we have heard this worry raised, and it surely won’t be the last, until everyone is satisfied and happy that the security and sustainability of the NIS remain unchallenged and free from undermining. Of course, there will be the cynics among us –– the more carefree of our senior citizens –– who do not have to worry about being here in 2050 and who couldn’t care less what others who come after them face.
We stop short here of saying some of our political leaders think the same. We will not impugn their honourable intent. We, however, note the expediency of the Government in drawing down funds continually from the NIS’ surplus to underwrite its several expenditures. This, of course, does not sit well with Mr Delmas.
“You are going to hear the politicians say that the NIS is in surplus. What they mean is that contributions currently exceed benefits. But if we value NIS assets and liabilities, it is in deficit. In fact, in 2022 it is estimated that benefits will exceed contributions. By 2050 it is estimated that the fund will be depleted.”
When you juxtapose these projections with the expressed wish earlier this year of NIS director Ian Carrington himself that to circumvent any stress and strain on the fund greater productivity was required and an increased number in youths in the workforce, given the circumstance of an aging Barbadian population, it does call for some reflection on how as a state we are managing NIS moneys. That, as Mr Delmas says, 70 to 80 per cent of the assets of the $3 billion fund is in Government paper does raise a red flag.
This is not a time to be stressing doom and damnation, but it is equally not an occasion to be turning a blind eye to their lurking possibility. We are yet to hear a Government spokesman respond to Mr Delmas’ concern, which on the face of it, and to all intents and purposes, should be of some discomfort to all of us, if we shall have any love for our progeny.
We need to have the Government’s assurance that there will be no haemorrhaging of the NIS fund.
We are not unmindful of the unusual obstacles facing us all in these strenuous economic times, nor of how emphases on the negative can be derailing and lead to failure. But it behoves us to insist that in these uncertain times our Government –– or those who speak for it –– must inspire us all by regular communication, and by example, to problem-solve our way through the obstacles facing us together. That way there is an even chance our immediate future will be favourable –– even remarkable.
Let’s be frank. Moneys sitting “idly by” –– surplus or not –– will almost certainly attract the attention of Government politicians. In good times, and in worse.
In the latter, when bills are outstanding and promises have to be kept, surpluses wherever they may be will be there for the taking –– or borrowing. Who knows better where to find these cash cows than the Minister of Finance?
And so, fully cognizant that the NIS was awash in Grantleys awaiting extra effective utilization, what better way to ameliorate a choking economy up to its neck in debt –– with the honourable intent of repaying all advances, of course!
Indeed, the Government just may have plunge its hand in the National Insurance Scheme cookie jar a little too often to shore up its health, education and tourism financial commitments, but if these helpings are investments and borrowings, returns are to be expected. And, due diligence should see to that.
If the NIS is in surplus and can continue to meet its obligations to its beneficiaries indefinitely, for all the fears of Mr Delmas, we are happy. But we say this: one may rappel down safely and spectacularly the multi-storeyed CGI Tower, or bulwark the Constitution River banks, or guzzle a Banks and its Deputy all at the same time. But one will not as easily reconstruct a National Insurance Scheme that has collapsed.