Government was advised, by an actuary, to take steps to protect the National Insurance Fund because they had calculated that the NIS Fund would be in trouble by 2035 if pensions were continued to be paid at the then existing rate. They reasoned that Barbados was an aging society, and with current life expectancy and a declining birth rate that there would be too few persons contributing and too many persons receiving pensions for the scheme to remain viable. The Government had several options to ensure the fund’s viability, and this is what they have done so far:
Increase the pension age with the hope that more people would die before attaining pension age;
Change the formula for calculating the pension, resulting in a much smaller pension; and
Give people the opportunity to receive a reduced pension if they applied early, and an enhanced one if they deferred applying for their pension. They guessed that there would be a neutral effect on the fund because the people who opted for early pensions would somehow be offset by the numbers who deferred. Unfortunately, hundreds opted for early pensions and less that 10 deferred as yet according to my information.
The corrective measures clearly show that the NIS Fund is under stress. It is inconceivable that the fund is as healthy as the Minister of Finance is telling the country. For the sake of argument let us assume that the Government is correct in their assertion that the NIS Fund is healthy. Then they must also explain why they thought it necessary to sell off the NIS shares in the Barbados Light & Power Company which were paying handsome dividend yearly, and projected to do so for the foreseeable future. If they needed cash so badly that it forced them to sell off assets, how can they justify the gamble of putting $50 million in the Four Seasons apparent white elephant.
In whose interest is the NIS Fund being managed? Everything that the Government has done to date to protect the fund has proven to be detrimental to the individual interest of persons who contribute to the fund. On the other hand people like the Canadian company Emera, CLICO and now Four Seasons are reaping the sweets of the labour of Barbadian workers.
The Minister maintains that the fund is healthy, and I sincerely hope so, but how can he make this assertion without the benefit of audited financial statements for a number of years. Where did he base that conclusion?
The National Insurance Office is in a very poor state in terms of the management of the fund. I challenge them to deny, with proof, that the NIS fund is so poorly managed that they were unable to detect an ongoing embezzlement for years which resulted in the loss of millions. The only became aware of the embezzlement when a commercial bank brought it to their attention.
Some Years ago, I was representing a lady who NIS accused of receiving a benefit in duplicate, which she denied. I well remember, at the meeting to resolve the matter, I identified, by job functions, the persons that were embezzling NIS money. Rather than deal with the matter, I was threatened with a lawsuit for defamation. Years later and millions of dollars later, I was proven correct by the arrest and confiscation of assets of one very junior employee from the area that I had identified years earlier. So don’t tell me that the fund is sound; you just don’t know, you might be counting money that had already been embezzled.