The blogmaster thought it timely to highlight one of several NIS blogs in a COVID environment for obvious reasons. After many years of calling for certified audited financials spanning different governments we are none the wiser – David, blogmaster
Is it irrational for citizens of Barbados to lend their accumulated savings , gratuities and separation packages to the GoB? Based on GoB track record is it unreasonable to expect repayments of those loans? Would you prefer the citizens to buy imported luxury consumption goods with all their income?
The citizens now senior were making provisions for their old age. The interests payments were intended to augment their income /pensions and to educate their children.
Interest rates on GoB papers rarely exceed 7.5 % and they were down to 6% in the last 5 years,. It is a serious breach of contract for GoB to squander its reputation as a country which honours its debt obligations. It is going to be difficult to gain the confidence of lenders in the future. A very short sighted decision.it was to default.
The blogmaster was reminded that the National Insurance Scheme is the holder of over 2.5 billion in government paper based on their website.
What does the restructure of government debt restructure for NIS and Central Bank of Barbados government holdings?
How will the reduction in investment income impact the fund’s capacity to deliver pensions to senior citizens?
Of greater concern is how will retirees negotiate the economic hurdles posed by the debt restructure because of what they thought was astutely investing in government paper to supplement retirement income. The reality however is that any investment carries risk, government paper is no exception.
http://www.nis.gov.bb/investments/
Monaco average salary 10K euros a year and a population of 36000 roughly.
Do we need to import people or do we need to restructure our governance and economy?
Are we chasing numbers when we should be chasing dollars?
Just questions for the planners in our post covid economy.
@John A
We have an inflated property market. This is where is starts and end. To restructure a huge debt will have to be ‘burnt’.
@ David.
That my friend is the reality right there. A substantial amount of debt will have to be restructured and quite a bit forgiven by both banks and government.
For instance government needs all like now to be working on a tax amnesty starting June 1st to August 31st, where all penalties and interest will be waived on debts owed, once the principles can be cleared by March 31st 2021.
Banks also will need to forgive interest payment for the period April to June 2020 and not attempt to defer them. We as consumers hold the power here so we can call the shots by demanding this and refusing to settle until this is done. We are willing to pay the principles of course, but not a red cent in interest on the April to June period.
In other word we the public that the banks and tax man have been raping for years, now want payback on our patronage with a waiver of interest and penalties. I mean wunna could continue to carry it on your books if you lack employment, but why do that knowing it will not be collected?
As I said before it is when I see things like this happening, that I know those involved understand the post covid economy. Also remember no bank in its right mind would want to repossess a house now. To do what with to sell to whom? It pays them better to enter a new agreement with the client and take a smaller payment. In other words the days of financial institutions dictating what will be done is over. The power now lies with us the consumers.
Remember the old bajan proverb “tek little bit and live long.”
The public silence on the NIS is deafening. After years to white wash the walls, scrub the floors, and sanitize the furniture; they can’t. The stench can be smelt from St.Vincent. They don’t know how to cover-up the bloodbaths which occurred.
When the Board Chair addressed the last BLP Annual meeting in October, the MC introduced him with a caveat, he would ONLY speak on, and respond to questions, on the Transport Board, where the same person is also Chair. In other words, the NIS is off limits.
You want a reason to march? Keep 6 ft apart, and encircle the whole island. This is everybody’s money. ALL yuh have a right to be there. And a damn good reason. Get up, Stand up. If you don’t fight, the cupboards will be bare. And you will have only yourselves to blame. #UPdeTINGv2.0
De last guv’ment used the NIS as a money pit an wunna gotz a problem wid dat? Wuh yuh think dis is? Dem is de guv’ment, dem cud do whuh dey want.
Dem does invested in tings like….well tings dat mek money. An when I get 65…67…72…I will get lil money.
But onliest question I got is who does approve de investiments that dem does do? Dem does know whuh dey doing?
NorthernObserver
May 21, 2020 12:56 AM The public silence on the NIS is deafening.
Well Northern, what do you expect? Hiding things behind closed doors is a bajan cultural phenomenon. Just like the surgeon now being admonished for complaining in public about the conditions in the QEH.
But the thing is, just as hiding things behind closed doors, everybody knows what is taking place.
Same way people know that Peter horning he wife wid the young ting Enid who does also got a young fella from up in St.Philip, people know that the QEH is a mess. People know that the NIS is in potta.
It is fine to discuss on the phone, or in small groups playing dominoes. But not in public, especially not the media. Because that causes loss of face.
True or not?
You would have noticed not a single BLP supporter on the blog have attempted to discuss this matter in the same way as they are doing on the other blogs. The great hypocrisy!
Before any NEW NIS schemes can be introduced and EFFECTIVELY IMPLIMENTED AND OPERATED the faith in the system has to be restored, ie all political interference has to be removed, and NIS not used as ATM, and day to day operations totally removed from Barbadosprivate sector influence.
@David
You expected different from the party loyalist. Dem too busy on another topic defending Liz Thompson private jet flight. LOL
Every government that gets in talks about the NIS but not one has ever addressed it. The reason is to address it would mean the true mess the fund is in would be made public and then none of them would be able to dip in it as needed. So we the owners of the fund are kept in the dark.
Imagine if you had shares in a mutual fund locally and the fund management never published audited figures of how your money was performing? I am sure the shareholders would be at the MOF door, their lawyers door and every other door they could think of raising hell over it. But because it is “government ” they are quite happy to leave it as is and demand nothing.
So the question is whose fault is it that nothing has been done about the NIS? Simply put it is ours because we have demanded nothing from our leaders on the issue.
@John A
Do you agree with Northern Observer’s previous comment the NIS fund should be ring-fenced and a good place to start is to create an oversight arrangement with a few CAs and Actuaries?
@ David.
Ring fences for sure and along with what NO is proposing they also need an independent asset acquisition committee made up of similar people.
In other words when the next MOF come trying to sell them scrap paper they will be able to say no thank you. When the next person that builds a NHC building comes for financing and it cost $500 a sq ft the answer will be no.
My question that no one can answer is what is the true net asset value of the NIS fund based on market value?
Not a man or mouse going answer that.
@John A
It is difficult to visualize how an NIS fund can exist without interference if you accept government enacts the legislation within which the government operates.
The issue is not specifically interference, nor whatever decisions are taken, the issue is Transparency and REPORTING. As custodians of the Barbadian largest store of financial security, their mandate REQUIRES them to place before the public on an ANNUAL basis a REPORT, the financial part of which is audited by a professional. This failure to report started BEFORE the “lost decade” and has now continued well into the mandate of this current administration.
Appreciate, the Board of Directors can REPORT on activities without audited financials??? It can REPORT on the activities undertaken by both itself and the management of the NIS. It can REPORT on the loans and investments, and on the various significant changes to operations. It can REPORT on the challenges faced, and the solutions sought.
#UPdeTINGv2.0 DEMAND a report. The employers who remit can squeeze by sending funds to an Escrow account. The public can help by protesting. The silence MUST BE broken.
@ David
@ Northern
What should really happen is that we should look at the NIS as a new entity. let independent auditors go and call in who they need to so as arrive at what the true net market value is for ALL their assets including the real estate and worthless paper.
Once that is done the auditors then confirm the expenses and income based on THE CURRENT MARKET SITUATION. In other words don’t come and tell me what the NIS used to collect in 2007, I want to know what it collected in 2019 and for the first 6 months of 2020.
Next step is to confirm the payables and receivables and then produce the first financial statements for them in must be 20 years. We write off what receicables are old and uncollectable so as to reach a true figure. Once this is done then we go forward every year.
Remember 2 things though if this is done. They going be worth much less than the politicians think and secondly we the public will be taxed to top it up so as to keep it solvent.
@JohnA
‘What should really happen is that we should look at the NIS as a new entity.’ [quote]
I cannot agree. This allows for the burial of everything from 2006 (or whatever period the last report covered). One cannot tolerate this. This plays right into those who had the responsibility to report, but failed to do so.
(1) The Board shall Report and
(a) in each year prepare a report on its activities in the last
preceding year and shall furnish such report to the to Minister.
Minister not later than the thirtieth day of June;
(b) submit to the Minister every account, certified by the
Auditor-General pursuant to section 30, together with the
report of the Auditor-General thereon, within one month
of such certification; and
(c) submit annually to the Minister an account of the
securities in which moneys forming part of the Fund are
for the time being invested.
(2) The Minister shall cause a copy of every report of account
submitted to him pursuant to this section to be laid on the table
of both Houses.
The reporting by the Board of Directors is broken into 3 categories. In addition, under (2), The Minister has to report. Note “Minister” means the Minister responsible for National Insurance; not the MoF.
Also note the sequence, the Board submits to the Minister, the Minister then tables submitted documents in both Houses. It is this “tabling” which makes the documents PUBLIC. Until we are told, we have no idea IF the Board was reporting as per 33. (1)? Because they were not tabled, does not mean they were not received?
Note that 33 (a) says nothing about financials. That is covered in (b) and (c). It became ‘common’ to combine all three, a-b-c, into a single document, called the Annual Report.
@NO
From all reports there seems to be holes in the data which have retarded the goal of audited financials. A decision has to taken at some point to move on.
>
@Northern
You know that is what should happen as I do, but if after all this time it hasn’t, I can’t see any other way of getting back on track to where we can arrive at the true value of the fund.
Let’s face it if there was never any accountability for over 15 years it will hardly start now.
Whatever, has prevented audited financials is one thing. The lack of audited financials does not absolve the issue of 33 1-a. That report is not specifically financial.
You can turn a blind eye, hold nobody accountable, and continue as though nothing ever happened. That solves nothing. It condones the failure to report. This is tolerable with 10 year olds, NOT with the NIS.
We can make mock sport, about adding to the population (more NIS contributors) or changing the qualifying standards for any fund (its been done before), but it doesn’t address deeper issues. We can have all the checks and balances which @VC is so fond of, but they are useless unless enforced.
From all reports there seems to be holes in the data which have retarded the goal of audited financials. A decision has to taken at some point to move on.
You can’t be serious!! What holes in data what!! The entity that owns, generates and controls the data somehow “has holes in the data”?
Man wunna really tek Bajans for poppits in trute.
@Dullard
That is what the audit house contracted under previous government shared. You can also peruse auditor general reports.
@ David.
Yes that is what they said. Apparently they were large gaps where there was no data available hence it was impossible for them to reconcile periods in many of the years. As a result it was impOssible to audit a year.
I know NO doesn’t like to let them off the hook but for the sake of Barbarians the only way of getting a handle on this is to start fresh as I suggested.
@Blogmaster, John A.
Let’s walk through it. There are really just 4 types of important information needed to monitor the NIS: contributions, benefits paid, investment data and any meta data (age, name, benefit type, etc)
Can you envisage a world in which any of those is missing for a prolonged period of time and the fund is still able to function?
@Dullard
A simple process like reconciliation of pension payments issued and paid is/has been a challenge.
@ Dullard.
I know it is truly frightening but look at the challenges an unknown NIS fund is now entering into.
Drastically reduced income from 38000 workers not making contributions due to unemployment.
The cost to support the said 38,000 in terms of unemployment claims.
Lost of investment value both locally and Internationally.
Lost on Sinkyuh bonds held with a value of roughly $2B, that have been slashed in interest earnings by roughly $100M yearly.
Overpriced real estate assets that on their ridiculous book value, have lost at least 30% of their true value this year.
The risk of rent lost on their real estate holdings by tenants not being able to pay rents.
Based on all of the above how much you think the NIS is really worth in net terms and remember the private sector layoffs are yet to come from the non tourism sectors like retail etc!
Today more than ever in our lifetime we need the NIS financials to be known to the dollar. How can a country face a crisis like this, with a fund that has been managed like how a 12 year old would manage their piggy bank?
@ John A
I have to agree with your May 22, 2020 8:17 AM & 9:10 AM contributions.
I’m amazed that any NIS director or financial controller wouldn’t independently initiate preparing financial statements without being instructed by a politically appointed BoD. Unless, of course, financial statements were actually prepared, but certain information was withheld from the auditors so as not to divulge the true financial position of the scheme.
You mentioned the reduction in contributions as a result of the unemployed 38,000. But, you’ll also have to consider the scheme will no longer be receiving the 12.75% ER NIS employers would have paid on the salaries/wages of the 38,000. And, a reduction in EE NIS 11.10% and ER NIS 12.75% contributions as a result of ‘short hours.”
Also, I’m sure you’re aware the ER NIS is an expense to the business. More unscrupulous employers will use the current economic environment as an excuse not to fulfill their statutory obligations.
With decreasing revenues, there would obviously be an increased incidence of employers not remitting the EE & ER NIS contributions deducted.
We also have to take into consideration employees applying to the NIS tribunal for severance payments.
Then what about people who will opt for early retirement at 60 years.
And, yuh know what? This won’t be anything that will occur progressively and allowing the scheme ‘breathing space’ to recover. It will affect each of the scheme’s benefits at the ‘same time.’
These are just a few minor reasons why the scheme’s financial data should be ‘up to date,’ so the NIS wouldn’t be relying on ‘guess work.’
wait until the shit really gets going..
https://barbadostoday.bb/2020/05/21/massy-drops-seawell-air-services/?fbclid=IwAR1N99aQoxNPkJDGgQzeQ9PjCMlBRbYo2TSTkSmi4gtJubZZ1OapEfoYAhs
“The Trinidad & Tobago-based Massy Holdings Group is still awaiting the Barbados Fair Trading Commission’s (FTC) approval of its sale of Seawell Air Services to Goddard Enterprises Limited (GEL).
This was outlined in the most recent six-month unaudited financial filing by the regional conglomerate. In a statement from chairman Robert Bermudez which accompanied the financials, shareholders were told there was a 12 per cent decline in the half-year profit before tax, due in part, to the Seawell sale.
Last October, chief executive officer of GEL Anthony Ali confirmed that Goddard Enterprises was moving to acquire the operations and assets of the ground handling company which is based at the Grantley Adams International Airport.
“The transfer and pending sale of Seawell Air Services incurred a TT$24 million (BDS $8 million) loss arising from severance costs required and an impairment on the value of the assets transferred,” he pointed out. The chairman noted too, that the novel coronavirus had also impacted investment income earned by Massy United Insurance.”
@ John A
Based on all of the above how much you think the NIS is really worth in net terms
The NIS is probably technically insolvent. If it were a private fund in an enlightened jurisdiction, the regulators would have taken it over by now.
Your 9.10 contribution didn’t even mention the demographic risks or that some of the principal of the local bond portfolio is at risk of not being repaid.
@David
A simple process like reconciliation of pension payments issued and paid is/has been a challenge.
This is just ridiculous. Maybe staff are dipping into the fund?
Well i dont know where to post this, i just want to know if it’s true and so should everyone else. The part where foreign creditors have not been repaid anything. I thought an agreement was reached to pay international creditors months ago.
“Do Barbadians realize that after borrowing almost $3 billion in two years, raising the highest level of taxes of any government, writing off over $1.5 billion in taxes, destroyed the confidence of government bonds, massacred the consumer confidence and spending power, employing the largest consultants and advisors in the commonwealth this government has yet to pay a single cent towards our foriegn or local debt?”
If we deduct an 80 percent contingency reserve from the NIS asset, we have a real asset.
Currently, NIS no longer functions with a capital base, but only as pay-as-you-go insurance. What comes in is immediately paid out again to the needy masses.
It would be best to dissolve the NIS. Then we would save the human overhead in administration. Any monkey could invest the money better. Shares and ETF are a bulletproof investment as long as you live on the dividends. The Swiss company Geberit, for example, which we know from the toilets, pays a 20 percent dividend on certain shares.
Welfare deep state means poverty, social liberty means wealth.
Head of the Sir Arthur Lewis Institute of Social and Economic Studies at the University of the West Indies, Cave Hill, Dr Don Marshall noted that the silver lining was that the evidence pointed to a well managed NIS over the last three decades.
I would like to get some of what he’s smoking.
@Artax
Yes you are correct by the time we add the amount lost from the employers part of the contribution you got more burden on the fund.
The other hard one to measure In terms of lost revenue to the fund, is the underemployed. All those that might end up working 4 day weeks or week on week off. So yes these people will not be unemployed, but basically underemployed in terms of a 40 hour work week.
It’s time for all to have a reality post covid wake up call.
@Artax
Help me with something. Why are the employers so ‘gun shy’ to put the screws to the NIS? Let’s forget those who do not remit. Of those who do remit, it is a lot of THEIR 💰. I cannot comprehend, what has all the major employers so afraid? NOBODY seems willing to say anything in public, far less DO anything. Herbert was willing at one time, but those drug charges silenced him. Walter has spoken on BU occasionally.
@ NorthernObserver
It may not be beneficial for the major employees if they were “to put the screws to the NIS.”
I’m sure you’re aware the owners of many of these large companies contribute to financing the campaigns of either the BLP & DLP…. or, as in the case of Bizzy, who admitted to contributing to both political parties…..
………….. perhaps to be awarded lucrative government contracts.
C.O.W filed a law suit against ‘government’ because he wasn’t awarded a road repairs contract?
Both BLP & DLP administrations have used NIS funds to finance projects conceptualized by the private sector. Didn’t C.O.W also received an ‘investment’ from the NIS for his “Apes Hill Polo Club?” Didn’t the NIS ‘invested’ in the NHC/Mark Maloney “Grotto” housing project? Former housing minister Denis Kellman’s said such ‘NIS investments’ are necessary, because they create employment. More people being employed means more people contributing to the scheme.
Do you realize the majority of government vehicles are purchased from the major new car sales outlets? BMWs and Mercedes-Benz for the judiciary from McEnearney (MQI) and Simpson Motors respectively; Suzuki Vitara, Chevrolet and Isuzu for the police, central government, BWA are purchased or leased from Simpson Motors, while Nissan X-Trail, Hyundai from Courtesy Garage.
These simple examples indicate how “major employers” benefit financially in the long-term, even if it means ‘closing their eyes’ to certain things.
@Artax
The symbiotic relationship between the two sectors. There are alot of employers beyond the 7 who get mentioned frequently?
Yet the “Board of NIS” and the unit GoB are two separate entities. It is fine for the NIS to “invest” in any project, or “loan” to anything, once it isn’t a grant.
Seems “closing their eyes” is a new national pastime?