Vice President of the Democratic Labour Party (DLP) Ryan Walters is calling on the Mia Mottley administration to come clean on the true state of the National Insurance Scheme (NIS).
This comes on the heels of Tuesday’s announcement by Minister in the Ministry of Economic Affairs and Investment, Marsha Caddle that the International Monetary Fund (IMF) would be topping up the Unemployment Benefit Fund of the NIS over the next three years to the tune of $180 million.
The first injection of $50 million has been made to ensure unemployed residents are able to continue to receive benefits.
Close to 40 000 claims were made on the NIS last year for unemployment during the height of the COVID-19 pandemic, resulting in the NIS paying out in excess of $155 million in 2020. By the end of the first quarter of this year, the Fund was said to be totally exhausted.
In light of the IMF intervention, Walters, the DLP spokesman on entrepreneurship and small business, said the time had come for a true picture of the island’s social security scheme.
“One has to consider the very health and sustainability of the entire portfolio of funds, including the Severance Fund, which has severe ramifications for pensions down the road,” he said in a statement on Tuesday.
“The Barbados Labour Party is urged once more to present a recent actuarial valuation for the National Insurance Scheme. In November of last year, the Democratic Labour Party first called on the Government to provide the usual three-year independent analysis of the Fund’s performance and future. Based on our information, the last published report covered the period 2012-2014, which now puts two reporting periods, 2015-2017 and 2018-2020, outstanding,” he noted.
“The Government inflicted a heavy blow on the National Insurance Scheme in 2018, when it wrote off approximately $1 billion due to the scheme from the Government. This was a significant blow to the forecasted performance of the Fund and is expected to hit contributors hard at old age,” Walters warned.
“We also know the damage that the COVID-19 pandemic has had on contributions coming into the Fund and the strain to pay disbursements to affected citizens. It is therefore top priority that the government moves to understand and share the overall health and financial future of the National Insurance Scheme. It cannot be that the Government is operating such an entity with a piecemeal approach of attending to its affairs in a sporadic way.”
The largest fund in the NIS, the National Insurance Fund, was said to have close to $3 billion in its investment portfolio at the start of this year, and that was being used to help pay unemployment benefits.
Meanwhile, the Severance Fund, from which millions of dollars in severance payments had to be made last year, was said to have some $74.1 million at the start of this year.