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
@ NorthernObserver October 28, 2017 at 1:06 PM
Agree that such long-term investment/lending projects should normally find themselves in the body of any annual report and not in the immediate purview of the actuary.
However you might want to agree that any loans to the principals behind the Hyatt must have some kind of ‘security’ attached with the most obvious being a sovereign guarantee (contingent liability) from the GoB given the track record of an intimate financial relationship between the same principals backing the project and the current administration.
Just look and see what happened to the Four Seasons fiasco although the same principals might not have been directly involved in the project resuscitation fiasco.
Miller with Maloney involved in Hyatt, the same prinicipals involved in 4 Seasons scam are in the shadows hiding, Cow, Bizzy, Bjerkham etc, like they normally do …..they are.Maloney’s bosses, he fronts for them all the time….to once again suck the pension fund dry..
…….tell me it is not so….that you are being hypothetical…about any NIS money going to Hyatt.
What happened to the commercial banks on and off island that these people are reluctant to borrow from….why must they always target the treasury and pension fund…it is like an obsession….tiefing from the people….when the project goes bankrupt like 4 seasons scam….
…then what..la guillotine, le chat o ‘neuf queues…for the tiefing perpetrators of those scams.
Miller…I believe it’s you or one other who hit the nail on the head…they do not want local actuaries or bajan actuaries who live outside to know what’s really going on….but IMF will see it, it has to come out in the wash…cause IMF does not fear them….and will talk.
I tend to look outside the box.
Centric is a newer brand (to Hyatt I mean not Bushie) and these developments are all morphing. AirBnB just announced a ‘deal’ with a condo, which already had some mixed use. Centric is essentially a hotel brand, with condos on some floors and retail. The difference to the AirBnB deal? Brand.
On the ‘investors’, beyond the BU pin-up boy, at least one of the other known parties, while not a daily target on BU has some serious money. Rumour has it, they sold the US Embassy property for big money. Precisely the “principals”? I don’t know. I would expect, given current trends, major tax concessions. Both for construction and ongoing operations.
That said, we can also expect some level of government involvement. I am not sure a CCC rated sovereign offers a guarantee of much value to the international community? Is the NIS an ‘investor’? Possibly. Are the Chinese involved? I don’t know. Can the ‘principals’ find their own financing? More importantly, do they want to?
I have less of an issue with the NIS investing in local projects, once they have sound financials/prospectus, and its not a money for money scam, than I do with the NIS continued flagrant abuse of the law. They are required by law to produce certain documentation by a certain date. While I appreciate the relevance of “who” produces them, it becomes a second issue, IMO, to the fact they are PRODUCED.
On the subject of NIS investing in local projects have we seen reports on the returns of the two building built with NIS monies that were constructed in the Warrens area?
Seems as if we have three level of discourse in Barbados
Public – this is reserved for rum shops and homes
Private – this is reserved for all government deals/business
No response – this is the same as private. If you don’t get a response don’t follow up…
It’s like Alice in Wonderland or some kind of alternate universe
Don’t ask in public as this is a private matter.
But I asked in private and you did not reply
I did not reply because the job is completed and i thought you would have your answer
But what about the professional courtesy of a response
I like you because you have something that a lot of us on the outside does not have. Complete belief in country. You declared your hand too early and thus drew concentrated fire from one side. I suspect the other guys now believe that they have you in their pockets and so do not need to be ‘nice’ to you.
I admire you and PLT. You both have the courage to go back home and try to make a difference.
I just hope you kept foreign options open
@Hal Austin October 28, 2017 at 12:00 PM ” Is a state pension of Bds $179 a week an adequate income?”
A state pension of $179 per week is minimally sufficient. However most people “contributory pensioners” do get more than $179.00 per week.
This is how the elderly poor have to live on $179.00 BDS per week:
$98.86 for for food and cleaning supplies
$8.04 for water
$12.30 for electricity
$3.67 for cooking fuel
$10.00 prescribed medicine
$8.00 for a telephone landline
$2.50 for cell phone charges
$35.63 for everything else
Robinson and the whole NIS board should be fired. …they obviously are too ineffective and inefficient to fix anything they found that was ineffective and inefficient before..
“Barbados’ National Insurance Scheme (NIS) needs urgent help. It is being weighed down by excessive Government debt, ineffective administration and deficient governance.
Failure to provide timely audited statements as mandated by law is also a major weakness.
Social security actuary Derek Osborne raised the alarm in the just-released 15th Actuarial Review of the National Insurance, Unemployment and Severance Funds of Barbados prepared as at December 31, 2014.
Prominent Barbadian actuary Charles Herbert called the report “damning”. He said the entire National Insurance Board (NIB) should go if it cannot fix the major issues raised and be accountable to the public”
@ Simple Simon
Good post at 11.47 pm
That we could come up with a multi-billion-dollar NIS scheme which – in the end- provides such a shiite stipend to our aged after a lifetime of contributions to society, is an inditement on the scheme -even if it was NOT broke.
While the poor get only $179 per week, COW – who can brag on BBC news of his immense wealth- is handed millions and millions from the SAME fund to build lavish properties, …and others to build international race tracks etc.
Any people who are able to accept such treatment without protests, and complaint, and ACTION to redress the situation, …..FULLY DESERVES the shiite which awaits them…..
Robinson and his whole board should be fired shiite…!!!!
Robinson has been an idiot from the VERY START. Ask ANYONE at Cave Hill.
The man is an incompetent teacher, an incompetent administrator, an incompetent person…
Shiite… he is not even able to defend himself on BU…. against a shiite bushman…
That is his lot in life -not his fault really.
It is the ’eminent jackass’ who appointed him to chair the NIS that should be dealt with
…. and firing is not enuff ….
Pacha has identified an appropriate device to be considered.
Simple Simon October 27, 2017 at 10:47 PM #
I am not sure why you are so doubtful.
@Hal Austin October 28, 2017 at 12:00 PM ” Is a state pension of Bds $179 a week an adequate income?”
Apologies for being late coming back to you, but I shall deal with both your concerns here.
First, I have no doubt about the ability of black men and women to be outstanding mathematicians. Historically this has been the case. To suggest otherwise would be to go down the road of biological determinism.
Second, and most important, I have an intellectual curiosity about ethno-mathematics, the reasons why I have raised in the blog on a number of occasions that economics is not a branch of mathematics (nor of biology or psychology) and that we must challenge the consensual orthodoxies of every discipline, including mathematics and the wider sciences.
This is even more so given the rise of the digital revolution, with artificial intelligence making key decisions for us. My argument has always been if you put rubbish in to computers, you get rubbish out.
I am not a mathematician, but the basic history and sociology of mathematics is that it is just another filtering mechanism for colonial educational domination. But it is important that to oppose it you must fully understand the discipline.
Previously I raised the issue of Euclidian geometry. In the orthodox history we are told that the Babylonians first developed modern mathematics, then the Greeks. We know that is not true.
We know that the Egyptians had advance mathematics which they used to trade with the Babylonians; it is also my case that the Babylonians were not the only trading partners with the early Egyptians.
Before the Arabs moved in to Egypt the Nubians occupied most of that part of Africa, even after the Arabs moved in they continued to trade with the Nubians, as far as Sudan and Ethiopia. It is part of my argument that traders came from farther and wider, so they must have had a form of mathematics in order to trade. This is the historical and philosophical basic of ethno-mathematics.
As Bill Barton has asked: how did any one cultural form of mathematics came to dominate the discipline (to extend this argument, for mathematics, read medicine). Anyone with an interest in mathematics will tell you that in UK mathematics we use the X as a symbol of times (multiplication) in algebra, while the Americans use a dot, similar to what in the UK we use in decimals (in continental Europe, they use a comma).
To return to the substantive issue, my doubt was about a specific claim by the resident Googling, cutting and pasting artist, whoever s/he it is. Nothing more, nothing less.
I will stop here in order to prevent boring people any more.
@Simple Simon, About the Bds$179 a week state pension: why is this not part of a wider public debate, on political platforms and in the media? Why is it not part of the BU debate about the NIS Actuarial report?
Is it because we prefer to personalise our politics instead of dealing with issues?
“While the poor get only $179 per week, COW – who can brag on BBC news of his immense wealth- is handed millions and millions from the SAME fund to build lavish properties, …and others to build international race tracks etc.
Any people who are able to accept such treatment without protests, and complaint, and ACTION to redress the situation, …..FULLY DESERVES the shiite which awaits them…..”
This really boils the blood, that hard back black men and women in parliament whose ancestors and taxpayers suffered so they can be educated and enter parliament still allow this evil crap to take place year after year, generation after generation for 50 years after independence. ….in 2017….still.
It’s one of the most despicable acts if treachery by black governmeny ministers and politicians. ….right up there withall the other crimes they commit against the people and island for self enrichment.
In my view….le chat de neuf queues devrait être utilisé sur chacun d’entre eux, y compris la vache (COW), d’abord, puis la guillotine, les voleurs de faible vie.
Here is another exchange with Chairman Robinson. Do we need to examine/change the composition of the NIS Board of Directors?
Mathematics is its own language and is relatively simple…unless ya into calculus, combinatorics and optimization…which is very advanced new age mathematics, more complex than Ad Math.
If 20 scholars leave the island over a 7 YEAR period to study acturial science….most years since 2010 there have been between 40 and 60 exhibition scholars identified…of those may be20 per year leave to study various disciplines…..medicine, math, law, this, that, the next.
,….so if you going with my calculation of 20 scholars over a 7 YEAR PERIOD going abroad to study actuarial science……it goes. .
20 ÷ 7 = 2.8571428571….only 2 to 3 scholars per year leave the island to study actuarial science..
To round it off…let say 3 scholars…some years may be 4…..no multiplication (x) necessary, you (÷) divide the 7 year period by the 20 scholars who left the island during that 7 year period to arrive at an approximate amount of scholars who leave the island annually to study acturial science.
It’s the simplest of calculations….11 year olds do it in their heads.
So the NIS board, these named individuals are the ones approving this literal giveaway of millions and millions of dollars of poor pensioners money to people who dont need it ………and they think that is OK.
I read elsewhere (cant recall exact source), that Herbert was quoted as saying he didn’t know the Board. It certainly is not listed on the NIS website, other than the basis of its formation..”The Board is made up of nine members and is tripartite, meaning that it’s made up of representatives of the government and workers’ and employers’ organisations.”
I find it odd CH wouldn’t be aware of these names? Or was his point they should be in the public domain, available to all?
Also, the Review references an “Investment Policy Statement”, and notes the significant actual variations from this IPS [Tables 1.5 and 1.6]. Whose responsibility are the investment decisions to ensure compliance with the IPS? The Board, management or Government?
Perhaps during one of your “online discussions” with NIS Chairman, Dr. Robinson, you could ask him to explain the following excerpts, which were taken from today’s Sunday Sun:
“Barbados’ National Insurance Scheme (NIS) needs urgent help. It is being weighed down by excessive Government debt, ineffective administration and deficient governance.”
“Failure to provide timely audited statements as mandated by law is also a major weakness.”
“Social security actuary Derek Osborne raised the alarm in the just-released 15th Actuarial Review of the National Insurance, Unemployment and Severance Funds of Barbados prepared as at December 31, 2014.”
It will be interesting to “hear” what he has to “say” relative to the “excessive government debt.”
@Artax and NO
Chairman Robinson replied that all these issues were answered in the public space already.
My impression from the “online discussion” is that he is doing the best he can in a difficult situation and that nothing will be served by calling out the Minister by virtue of the buck stopping at the Minister or by Justin’s resignation………………and as we all are aware not long before elections…..he may feel that he can do more good by staying the course.
Justin Robinson says he will make a statement tomorrow.
I just noticed that this review is dated 2014.
We can only assume that the position has gotton far worse in 2017…….in fact we know based on claims taking months to be processed.
If the people of Barbados do not rise up and take back their country from these vagabonds, very soon we will no longer have a country left.
Can you hear the political banter among the supporters
AA. Steeeups…u en hear de man say he is ‘re-profiling’. He is restructuring and consolidating de bonds.
BB. They are defaulting.
AA Wha default wha. Con-solly-dation. Look it up. It means to put tings togetter and mek dem stronger. Ya think effin u re-STRUCTuring, it en gine be stronger?
BB $1000 bond is no longer worth a $1000
AA. You en hear Chris…he said…’there will be NO devaluation under my watch”.
BB I said bond default, not dollar devaluation.
AA. U tink I’s an idiot. How else could a $1000 Bond not be worth $1000 unless we devalue?
BB Look even if the dollar devalues $1000 is still $1000, it just en worth US$500. A default means the Government promised to pay out $1000 pun de Bond but can’t. They tell you tek $600, dat is all you getting.
AA Steeeups. And u tink dat is we fault? De B’s issue dat Bond not we hear. Da Bond was issued way back when.
BB Wha shiite u talkin. The Government is the Government, it doan mek no difference who is in power.
AA Listen, I was told the Bonds issued under we watch, en coming due til 2022.
BB I en talking bout DLP bonds or BLP bonds, I talkin bout Guverment of Bahbaydus Bonds.
AA Look leff ma lone, to besides I en got nuh money to buy Bonds. I en care.
BB But the NIS own nuff Bonds. Effin de doan get pay, where u tink u pension money cumin frum?
AA Stuuups…alotta shiite talk. U bin drinking again? I get my check up to last week. Always bout de place spreading untruths. U mussee tink u es Trump….ha ha ha.
BB Keep laffin. At least you kan say I en tell ya.
AA Look why u doan gimme some of dem mangas in ya bag, and lemme gah long home.
“We can only assume that the position has gotton far worse in 2017”
Not really…read section 1.6.
Still at 75%
I guess a difficult situation means naming all directors but the MoF rep? The one who is mekking he shiite. Bringing down the word from above.
Lol…as long as ya keep ya distance, ya will be just fine..lol
@Hal Austin October 29, 2017 at 10:54 AM “About the Bds$179 a week state pension: why is this not part of a wider public debate, on political platforms and in the media? Why is it not part of the BU debate about the NIS Actuarial report?”
I honestly believe that the political class–and they have identified themselves–have long ceased to identify with ordinary Bajans, and if they have given any thought at all to how people manage to survive on $179 BDS per week, they, the political class believe that “those people” deserve to suffer.
“Chairman Robinson replied that all these issues were answered in the public space already.”
All of what issues? On p11 the Review references an Investment Policy Statement [IPS]. It continues in Tables 1.5 or 1.6 to show comparisons between the Actual NIF Investments and the Targets set by the IPS. The IPS is set and approved by the NIF,
WHO gave those charged with executing the IPS, instructions to flagrantly ignore it?
This is the crux of the investment mix issues. They draw up a plan, get it approved, and then purposefully do not follow it? WHO? WHO is giving permission to invest NIF dollars, in amounts other than those set and approved under the Investment Policy Statement?
I have never seen that in a public space, or did I miss it?
Simple Simon October 29, 2017 at 10:42 PM #
The so-called political class gets away with murder because of our flawed democratic system – the myth of the Westminster model which even lawyers and politicians have a warped understanding of.
In exchange for a vote every four or five years, the ruling party runs the country in a form once described by the late Quintin Hogg as an elective dictatorship. They set the parliamentary agenda in an almost total way: the entire debate is forged by the government; they rarely report to parliament (remember when Sandiford announced the general election in New York? Under the Westminster system that would have been disallowed. Parliament must be first to be told) Stuart has done the same thing).
Our public discourse is party-political party. Most of the participants would not understand objectivity if it fell on top of their heads. Just read some of the contributors to BU, including columnists.
Again, what passes as political journalism is simply personalised party propaganda, and what party supporters believe is serious political debate (ie whether the leader of the Opposition has an LEC) is really political semi-literacy.
The better informed come up with wise ideas such as petitions, but when asked what is the next step they get angry. How dare you ask such a question? Then we have new parties with the same restricted agenda.
Why is it that no party is talking about pensioner poverty? Why is it that no-one is talking serious about reforming the NIS? Why is it that non-one is talking seriously about economic reforms, apart from nonsense about ISO 9001, as if that is the answer?
We can go on, but the point has been made.
Prodigal Son October 29, 2017 at 6:57 PM #
I just noticed that this review is dated 2014.
The next report is due in December – a report that is three years later and not a single resignation, or even reprimand. All the civil servants ill get their salaries and eventually pensions; the politicians will get promotion and the actuaries will get well paid.
@Prodigal, the issue has not even been debated in BU. We are too busy talking about LECs and other rubbish.
@ Hal Austin October 30, 2017 at 5:30 PM
So why can’t you be first off the mark and call for the immediate resignation of that “foreigner” Dr. JR the management quack?
After all, he is just an easy partisan politically-appointed target for your xenophobic ‘foreigner’ phobia laced with the arsenic of jingoism in your bitter gall.
Unlike your dead friend the Guyanese-born DPP who held a Constitutionally-enshrined position as if not the second highest but certainly one of the ‘primary’ secured juristic positions in your far way home away from home in a backward place called Barbados.
So let the miller’s grandson from “M’lud” Hill do it for you:
Dr. JR, you are an abject failure and must resign tout suite before you are fired on the altar of electioneering sacrifice to look like another little academically-fed pissy boy in the DLP pen yard-fowls.
Hal Austin is ready and willing to take your place to make a real difference in appearance.
The Actuarial report mentions why the report was produced late in the executive summary.
Dr Robinson speaks
Alas,[how silly of us all] the problem is the NIS cannot find anywhere else to invest its money. The Fx reserves are too low to be wasted on NIS foreign investments. So the best it can do in this small island economy is to invest in GoB fixed investments.
The figures quoted in the BT piece are correct, but irrelevant. Why? another tidbit from the 15th Review:
“The portion of combined investments held in government and quasi-government securities increased from 68% to 75%. This increase is contrary to both the Investment Policy and previous actuarial advice.”
previous actuarial advice??… this was 3 years ago….”Increase investment diversification with goals of reducing the portion of the Fund held in Government of Barbados to 50% over 5 years and increasing the portion held in overseas investments.”
And from the 13th Annual review some 7 years ago
“the National Insurance Board should limit additional lending to government
to amounts that will not allow the percentage of the Fund now held in government securities (57%) to grow any further.”
My point… Forget the reference by Dr JR to actuarial recommendations, the NIF have never followed them anyway. Was Forex low in 2008-09-10-11? Did the NIS alter their investment mix then as advised, or did they load up even more on GoB Debentures/Bonds? Would the NIF be better off today with cash or nearly junk bonds? The wussest part, is the primary reason the Bonds are nearly Junk, is because the NIS bought more, against all advice.
Another tidbit from the Review…After falling behind on its contributions and rental payments, the Government of Barbados covered some of its arrears by issuing Treasury notes and debentures to the NIF….so even though the NIS is lending the GoB millions, the GoB don’t have the money to pay NIS????? More paper.
You see Worrell? You see what happened to him after he towed the line, until he couldn’t take it any more? From the moment you hear the barber IS IN TOWN, catch the first flight you can.
Dr Robinson states on becoming chairman of the NIB, in 2008, he requested an audit statement and was told that there was none since 1999.
And now we have BLP apologists claiming how great their government was. Pot calling kettle black.
Dump the BLP and DLP.
It is NOT a BLP /DLP problem.
It is a Bajan brass bowl problem.
The principle advisor to the NIS is Denis Kellman – whose expertise is demonstrated at Moon Town. He is also the government and country’s chief spokesman on NIS investment policy.
It is like having angela Skeete running BU …and expecting Bushie to behave himself….
@ David October 30, 2017 at 6:54 PM
“The Actuarial report mentions why the report was produced late in the executive summary”
Can we expect another set of cut & paste excuses lifted from the same ‘executive summary’ and ‘reformatted’ for the next report for the period ended 31 December 2017 sometime late in the year 2020, with hindsight and all?
The overly late publication of the Actuarial report for the year ended 31 December 2014 and made available to the public in October 2017 is not the main charge on which Dr. JR should be asked to find alternative activities to spend his time just like the former Guv of the CBB.
Would you agree that the primary characteristic of ‘Information’ for effective decision-making is its ‘Timeliness’?
Wouldn’t you think that a management teacher and practising guru should be supremely aware of such a management ‘principle’?
We are holding him to his promises he boastfully made on assuming the chair to have the financials going back many years ready for publication in a ‘timely’ fashion.
Where are the deliverables he committed himself to? In any other sphere of business such a failure to meet agreed targets/deliverables ‘heads’ would have to roll.
What kind of Mickey mouse Westminster governance is going on here?
What are the ‘genuine’ reasons for the holdup in even being able to complete and deliver at least 2 or 3 previous years of audited financials even without their outdated and decision-making useless Annual reports?
Why create such vacuums only to be filled with speculative rumours about probable financial infelicities as the possible cause of these long delays in preparing and presenting financials?
Isn’t it a basic management responsibility and modern-day routine technical exercise given the expensive IT systems in place and the myriad of trained people on the Island with the apt skills in that fine and rewarding art of book-keeping invented by the early Egyptians and made simple by the basic equation of every debit must have a corresponding credit according to Pacioli under the ‘polymath’ guidance of a reincarnated Imhotep called Leonardo da Vinci?
Have the sophisticated modern techniques of auditing revealed a can of bogus worms waiting to jump out of a Pandora’s box full of CLICO type unexplainable transactions requiring further forensic-type investigations?
You could just get to find out that the GoB might not be the only user of that ATM.
The point you should note is that the lack of audited finacials and data integrity extends to 1999.
@ David October 31, 2017 at 11:33 AM
And it is precisely why the administration was changed to make a difference by bringing about improvements in the management of that national institution.
That is why he offered himself for the job in the Chair using his impressive CV as a change agent.
If he knew he was just a paper tiger instead of possessing his much bragged about management skills he should have stayed put in the esoteric world of academia.
$ 300 million in unaccounted foreign reserves and now this mess of being unable to present routine reports required for proper management control and decision-making.
If Dr. Worrell could be sent packing to save the CBB and the economy why not another quack to ensure a future lifeline for your generation?
No wonder the country is in such an awful mess when so called qualified people are unable to do their jobs properly. Only in Bushie’s land of BBBBBB’s would such bullshit escape a ‘firing whacker’.
Actually it is why the BLP as the government in waiting should deliberately articulate on the eve of a general election how it plans to tackle the NIS hurdle given it will be confronted with a familiar problem.
Looks like we are numb…..reserves have fallen further according to the ag. GOCB in his report this morning.
“Bush Tea October 31, 2017 at 8:41 AM #
It is NOT a BLP /DLP problem.
It is a Bajan brass bowl problem.
Wait…2 days in a row and we are in full agreement. Mussee Halloween…LOL
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