The National Insurance Department (NIS) says adequate cash will be available in its fund for payouts for the various social needs for now.
However, Chairman of the NIS Leslie Haynes said on Friday that while that is the projection of a liquidity report, Barbadians can be assured that there is no need to fear about the fund running into problems because there are options available to keep it liquid.
While declining to specify the timeframe reflected in the report which shows when the fund would need shoring up, Haynes contended that the coffers have not yet reached that point.
“The situation has not yet arrived where we have to cash in any government bonds. In order to keep liquid, we can always cash in government bonds. But cashing government bonds is not a good thing, because converting the government bonds into cash, we would be losing interest. And once we lose that interest then we would be in a spot of bother,” the NIS chairman told Barbados TODAY.
“You don’t want to lose your interest which you depend on to make payments from income. So the liquidity of the National Insurance being able to pay pensioners, in my view, is not the issue because we will always be able to pay pensioners. But if we have to convert bonds into cash, the issue is how do we get that interest income back? We don’t want to go there, but we are not there yet,” Haynes said.
“It depends on government’s commitment, and so far government has maintained its commitment to us by setting out a schedule for recapitalising the Unemployment Fund or the National insurance Fund and we are there,” he stated.
“The government has indicated that it will recapitalise the Unemployment Fund. The government paid some $60 million in December last year and another $60 million this year and probably $30 million to come the year following, speaking subject to correction. Right now I would be surprised if there are liquidity issues,” Haynes suggested.
At the same time, the NIS chairman admitted that the financial status of the fund is a matter that should be of concern.
“I am not saying to you that it is not something that you are not worried about, because, bear in mind we have paid out over $200 million from the Unemployment Fund and the Severance Payments Fund since this COVID thing started. I don’t know if you can imagine if we did not have that money to payout. Barbados would be in a mess. A lot of young people would be on the breadline,” Haynes declared.
Meanwhile, he dismissed claims that some pensioners have not been paid on time.
Chairman Leslie Haynes said on Friday that he had been assured by the Director that there were no late payments this month.
Haynes acknowledged that there was a problem before Christmas last year, but none this month.
emmanueljoseph@barbadostoday.bb
