DLP says no to raising retirement age, urges Gov’t to repay NIS

By Anesta Henry

The Democratic Labour Party (DLP) has broken its silence on the Government’s plan to increase the pensionable age, saying that it is firmly against the move.

And party president Dr Ronnie Yearwood, blaming the ruling Barbados Labour Party (BLP) for the current state of the National Insurance Scheme (NIS), called on the administration to repay funds owed to the state agency.

At a press conference at the DLP headquarters on Friday, Yearwood defended the party’s decision not to respond, before now, to the July 28 announcement by Minister of Labour Colin Jordan that the pensionable age would move from the current 67 years to 67 ½ years in 2028, and then to 68 years in 2034.

Although stressing that the DLP would never support that change, he suggested there was no need for it to rush to comment on the matter since the Pensions (Miscellaneous Provisions) Act, 2023, passed in the Senate earlier this week, did not mention raising the pensionable age.

“What the Minister said in his statement and what went to Parliament, there is a mismatch. So, either the Government is . . . flying a kite, they are going to amend the legislation later on, or there is some kind of regulatory framework in the law that would allow the new scheme that they are trying to create to amend the age for a pension without going to Parliament. But then that still isn’t going to add up because, if I recall, the original increase was done through law. So, the only way that you can do it is to pass a legislative act; you can’t just pass it by issuing an order and saying the age has gone up,” said Yearwood who told reporters the DLP was not involved in any discussions regarding reforms for the NIS.

“So I am still unsure as to if the age is actually moving. And given the way this Government does things, start and stop, go and come back, you don’t even know. But I would say this for the record – I believe, leave the age as it is.”

The DLP president charged that the Government’s restructuring in 2018 wiped out $1.3 billion of the NIS assets, severely affecting the sustainability of the Scheme, and the administration had to do right by the people of Barbados and repay the assets.

“The Government of Barbados should commit to a schedule for repaying the $1.3 billion NIS funds written off as part of the debt restructuring exercise of 2018. Of all the factors negatively affecting the NIS, this factor represents a deliberate choice by the Government to have the NIS bear this aspect of the IMF structural adjustment programme rather than making adjustments elsewhere,” he insisted.

“You wanted to be covered in glory rather than doing a debt restructuring that would have covered Barbadians. You wanted a debt restructuring which looked easy and where you had a win-win, but there is no win-win in a debt restructuring. You have to understand that there are consequences for your actions.

“And the consequence of the action is that we, the people of Barbados, are now paying for ill-advised debt restructuring. How do you wipe out $1.3 billion of the [National Insurance Fund] and then come and tell me, ‘Oh, it didn’t make a difference to the sustainability of the fund?’” Yearwood added.

Asked how the Government would repay the money, the DLP leader said the administration had 30 seats in Parliament and an “entire machinery” at its disposal to find a feasible way to give back the scheme what it was owed.

“I am not here to do the job of the Prime Minister or the Minister of Finance. I am sure they are more than capable of coming up with a way. As I said, it’s a schedule, so you can take your time. Take your time, whether it is through grants, through readjustment of your priorities, or whether it is through looking at some of the ways that you spend money on certain activities in Government for yourself,” he said.

Last year, Derek Osborne who completed the 17th Actuarial Review of the NIS, said the Scheme was in need of urgent reform. He highlighted the unprecedented impact of the COVID-19 pandemic on the scheme’s financial stability and outlook.

Yearwood suggested that the Government present to Barbadians what a sustainable multi-pillar Social Security Scheme would look like and how it could be implemented.

He suggested that could be a basic, actuarially-sound defined contribution type of scheme, including pillars to support lower-income persons and provide higher-income earners with opportunities to enhance their NIS pension and private pension arrangements.

anestahenry@barbadostoday.bb