15th NIS Actuarial Review of the National Insurance Fund, Published
When government debt is viewed with NIS holdings excluded, the implicit assumption is that these assets are not “real” and that government raising taxes to repay the NIS is akin to raising the contribution rate on NIS contributors. This is because government tax revenue and NIS contributions come largely from the same sources – businesses, workers and consumers.
While the above discussion is primarily academic, the Fund faces the risk of GOB restructuring some or all of the debt that NIF holds. A restructuring of Government debt could include the face amount being reduced and/or yields drastically reduced. Both scenarios have occurred in the Caribbean in recent years as governments with high debt to GDP ratios sought ways to improve their fiscal positions.
Extracted from the 15th NIS Actuarial Report