Tough decisions

People who currently contribute to the National Insurance Scheme (NIS) could be affected by its impending reform.

That is the view of Dean of the Faculty of Social Sciences at the University of the West Indies, Cave Hill Campus, Professor Justin Robison.

He told Barbados TODAY that while the National Insurance Fund is not in crisis now, Barbadians who presently contribute to the NIS could possibly still feel the impacts of any reform.

On Wednesday, during a national press conference, it was revealed by NIS actuary Derek Osborne that unless decisive action was taken immediately, the National Insurance Fund could be depleted by 2034 in a worst case scenario. He had cited a significantly reduced workforce and aging population as two of the main reasons the NIS was not performing as well as previously predicted.

Deputy chairman of the NIS, Rawdon Adams announced that they had already started to look at methods and proposals to fix the problem and hoped the first set of proposals would be completed by the end of the month.

“I am not aware of the proposals that are under consideration, but my off-the-top suspicion would be that it could affect current persons as well, because it is a problem that does need to be addressed like now,” Professor Robinson said.

He added that three issues – contribution income, investment income and benefit expenditure – need to be explored.

Robinson maintained that a thorough investigation ought to be completed before any decision is made.

“If you are going to address the problem, those are the three variables you can play with. So, the policies should explore that and they should be based on our own reality. What is the reality in Barbados? In many ways, underlying the challenges which the NIS face is the fact that the economy has not performed well over maybe the last 12 or so years and I think that sluggish, weak economy has really undermined any actuarial assumptions that were made in the past.

“My own view is that all options should be considered and carefully analysed so that we can come up with a workable solution to protect the NIS for the future. It is obviously a problem that is upon us and the longer we take to act the worse the problem will get and the more painful the solution,” he said.

randybennett@barbadostoday.bb