An actuarial review of the National Insurance Scheme (NIS) has highlighted the much criticized delay in claim payments and tardy annual reports and financial statements as major challenges facing the scheme.
However, while blaming “a backlog since 1998” for the absence of financial statements, Minister of Labour Dr Esther Byer-Suckoo is promising greater transparency.
According to the 15th annual actuarial review, which highlights the National Insurance Fund (NIF), Unemployment Fund and Severance Fund as of December 31, 2014, there were “several service and reporting challenges” that were of concern.
It said given the significant investment made in an administration and information technology system over the past 15 years, the NIS office was “underperforming what would reasonably be expected in delivering timely benefit adjudication.
“The concerns relate primarily to the time that it takes to award short-term claims and the time it takes to award pensions,” the report said.
“Obtaining complete and reliable data, both financial and statistical, from the National Insurance office is also a major concern. These challenges may be both system related and due to the lack of adequate human resources devoted to various tasks. As a result, the publishing of annual reports and the provision of data required for this report have been delayed extensively,” it added.
The NIS has a staff complement of about 300, about 280 of whom are appointed, while the remainder are on contract.
According to the 68-page review, delivered last Friday at the Ministry of Labour, “the NIS has not issued NIF annual reports since 2009 and has not submitted to the minister audited financial statements since 2004”.
However, Byer-Suckoo said the auditor general now had financial statements up to 2012 to be audited.
“I have said it before . . . but there has been quite a backlog since 1998. The auditor general did receive financial statements but because of the volume, the auditor general has been trying to work through those and has also engaged a private firm as well . . . So we have been able to do the work at National Insurance to get those statements to the auditor general … so work on that is ongoing,” said Byer-Suckoo.
She said the NIS board continued to “monitor the situation so that where adjustments are necessary they are made”, adding that transparency was necessary to help alleviate any fears regarding the scheme.
“We remain committed to ensuring the transparency. It is one thing for you to come here once every three years . . . and I try and convince you that the national insurance is fine, but you need to have access to that information.
“I believe the only way folks can continue to have the confidence in the national insurance is if there is that transparency, the communication and the availability of the relevant information. So we are working in all those regards to ensure . . . the confidence in the national insurance. It also means that when statements are being made abroad that may have the effect of creating panic, where the information is available persons would then be able to go and get it for themselves and be able to see that there is no need for panic,” the labour minister explained.
She said the delay in paying claims and pension benefits experienced during the reporting period was as a result of IT-related challenges when the NIS was making the switch to a new system, and not due to a lack of funds.
“Those delays that you have seen with cheques being issued in recent times would due more to administrative and technological challenges at the National Insurance, all of which the National Insurance was then able to quickly address to ensure that the matter was resolved, and we commit to continuing to do that, to be responsive and quickly addressing any challenges as they arise.”
The report also pointed to the need for the preparation of “good governance guidelines”.