The Opposition Barbados Labour Party (BLP) is demanding to know the true state of this island’s National Insurance Scheme (NIS) in the wake of concerns raised by the International Monetary Fund (IMF) last year that it could become insolvent.
“The people of Barbados need to know whether their hard earned contributions to the NIS will be there so that when they retire they will be able to enjoy a pension and other benefits that are rightfully theirs,” Opposition spokesman Dwight Sutherland said in a statement in which he called on Prime Minister Freundel Stuart and Minister of Labour and Social Security Dr Esther Byer-Suckoo to provide answers to the people of Barbados.
While accusing the ruling Democratic Labour Party (DLP) of using the NIS as its own “slush fund” and levelling charges of abuse against the current administration, Sutherland, the Shadow Minister of Labour and Social Security, further demanded to know: “What is the true state of the reserves of the NIS? What is Government doing to address increasing payments to the scheme to ensure its longevity? [And] why has the Government been deducting contributions from Government workers money weekly and monthly and not paying them into the NIS?”
The IMF’s Article 4 report released last August showed Government’s debt to the NIS had doubled during their period in office from 18.9 per cent in the 2008/09 financial year to 36.1 per cent at the end of the 2015/16 financial year.
The IMF had also warned that weak employment growth had also led to a deterioration of the NIS’ financial position and that its expenditures began to exceed contributions in 2013, rather than in 2024 as estimated in the NIS’ 14th Actuarial Review.
It further pointed out that since 2014, the NIS had been faced with late contribution payments from Government and state owned enterprises, with the bulk of the NIS’ investment portfolio — 74 per cent — held in Government securities, well in excess of an earlier suggested prudential limit of 54 per cent and the agency’s target of 60 per cent.
However, speaking to reporters on the sidelines of a recent productivity workshop, Byer-Suckoo sought to assure Barbadians there was no need to worry about the stability of the social security programme.
While stating that a detailed update on the state of the NIS and its ability to meet its obligations was yet to come, she dismissed any notion that the scheme was handing funds to Government, insisting it was simply purchasing Government instruments.
“This notion that NIS pays the bills for Government, that the NIS provides funding for Government, is erroneous in that national insurance may lend money to Government at very high rates, national insurance doesn’t say, ‘here, you cannot afford it we will pay that bill’. National insurance may loan money to Government and national insurance is guaranteed in contract, a high return on investment when it lends money to Government.
“So what does that mean down the line for national insurance and their liquidity and so on? They are not at risk. It ensures they are not at risk in ensuring that loan agreement provides them with a sufficient return [and] the Government of Barbados does not default on its loans. The Government of Barbados has a record of paying back all of its loans, including loans to the national insurance,” she assured at the time.
However, Sutherland was not satisfied with the explanation to date, suggesting today that there was need for even further worry in terms of the amount currently owed by Government in outstanding rent for its use of Baobab Towers and Tower Two.
Without giving any details on the outstanding rent, Sutherland pointed out that the issue was first raised back in 2014 by businessman Sir Allan Fields at the time of his retirement from the NIS board.
He therefore made it clear that the BLP was not interested in having the matter descend into “a political dogfight as other important issues have.
“This is too crucial a matter. Indeed, given the state of the country, no useful purpose is being served when the Government’s rabid pit bulls, hounds and salmon-tot retrievers descend to savage people who raise matters of public interest, but not deal with the substantive issue. At the end of the day Barbados loses,” he said, while insisting that NIS funds were not to be used “willy-nilly” by Government.