Reform report

PM says document on potential NIS changes to be shared with public soon By Marlon Madden Barbadians will soon know if they will be required to work longer or contribute more to the National Insurance Scheme (NIS). Prime Minister Mia Mottley announced on Monday that the Government was in possession of a final report from the Board of the NIS and it would soon be discussed with Barbadians. In addition to assessing the pension age, with the possibility of asking Barbadians to work longer or increase contributions, officials have also indicated that operational improvement of the NIS would be a necessary part of the reform mix. Assurances have already been given that the minimum pension rate, currently at $243 per week, will not be reduced. “You will hear a lot about pensions very soon again because we have now received the report from the NIS Board and after 11 months of consultations, we are in a position for the minister to address this matter shortly,” said Mottley. She was addressing the official launch of JUMP – an initiative that will see low-income families in Barbados getting access to high-speed broadband, laptops and digital training opportunities, through a partnership between Cable & Wireless Communications, which trades here as Flow, and the Government, through the Ministry of People Empowerment and Elder Affairs. Mottley contended that with the life expectancy of Barbadians being relatively high, people who become digitally literate are in a better position to supplement their pensions. “There is no country globally that is not facing a problem with respect to pensions, and it is largely because most of the developed world has, like Barbados, declining and ageing populations. It therefore means there are [fewer] people working to support the pensions of those who are coming today, and the question is ‘what will be the fate of those persons 10, 20, 30 or 40 years from now?’ “As a result, it means that if you are going to have the successes that we have had as a country that we have been able to increase life expectancy . . . [and] if you are going to reduce, as we have done, child mortality, and if you are going to be able to have the levels of prosperity that we have had, then we’ll also have the understanding as to how people can make themselves more useful and capable of earning on a longer plateau,” said the Prime Minister. Mottley reasoned: “We accept that even though the body may not be able to do the things that it used to do 20 or 30 years ago when you reach 65 and 70, the brain is still active for most people and the wisdom and the experience that you have is worth more than we can even start to quantify. This digital platform means you can be of use not just in Barbados but across the Caribbean and across the Commonwealth, across the world. We have, therefore, to use it.” Last August, the 17th Actuarial Review indicated that the island’s pension scheme could be in danger of being depleted between 2034 and 2041, and is, therefore, in need of urgent reform. The last major reform was done in 2003/2004, when the contribution rate was increased from 14 per cent to 18 per cent, the qualifying age for full pension was increased from 65 to 67 and benefits were slightly lowered. Factors such as people living longer, population shrinkage, administrative challenges, low employment, lack of compliance by self-employed individuals, and economic contraction have created concern about the future of the pension scheme here. marlonmadden@barbadostoday.bb]]>