NIS Government Paper for Trash

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.

Vincent Codrington

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/

254 comments

  • @Northern Observer

    Timely in the context the fund’s number will be called more and more during COVID especially as it becomes a protracted affair.

    >

    Liked by 1 person

  • We should seriously ask ourselves what we need the NIS for anyway. If the contributors themselves invested their fees on the international capital market, every citizen would make a massive profit.

    And the NIS? It invests its assets in junk real estate like the Apes Hill Plantation and pays a human overhead of administrative staff.

    Free the citizens and abolish the forced administration called NIS!

    Like

  • NorthernObserver

    The issues with the NIS have not been its ability to handle claims. They relate to the control and management of the funds, which under its rules, are the responsibility of the Board. The new board, appointed shortly after the last administration change, is yet to offer ANY TYPE of accountability report. (that I can find in the public domain) There have been more recent posts to the Investments tab, than pictured in this thread, which are even less detailed than prior entries.
    I see one of the B stalwarts, suggesting the need to focus on the IBC sector. Time to get your own home in order before you invite guests. I wonder if @PLT’s ‘new neighbours’ would be expected to make NIS payments.
    I am sadly convinced, the ONLY way to get financial reporting is to have employers remit to an escrow fund.

    Like

  • @NO

    Fair comment to the part about controls. Who would you have manage or have oversight of the escrow process?

    Like

  • NorthernObserver

    Any 5 ‘independent’ CA’s or equal, including actuaries. No lawyers. No known political supporters. Their function is purely to establish the financial reporting has been duly done, it meets current standards, and to release the escrow funds to the NIS.

    Like

  • @Tron May 19, 2020 12:16 PM

    We should seriously ask ourselves what we need the NIS for anyway. If the contributors themselves invested their fees on the international capital market, every citizen would make a massive profit.

    You realised the pension funds of many of the states in the USA and the 401K of many individuals are up shit creek? If pension fund managers and individuals close the action here in the USA can’t predict the market swings, what makes you believe individuals in Barbados will be able to do it.

    Like

  • The NIS started out with good intentions but due to a lack of oversight, turned into the MOFs piggy bank. I don’t speak specifically to Sinkyuh here either but to all before and after him.

    For the NIS to be safely protected it must be removed from the wishes of any government going forward. They also need an asset acquisition committee that again can not be dictated to by government. In other words you ring fence the whole dam thing from government abuse once and for all.

    I am telling you now if you look at the current valuations on the books of the NIS assets and you compare them to true market value, wunna would dead!

    Is it insolvent in terms of true market value verses liabilities? Could be but who knows as they haven’t provided audited financial statements for years. What we do know is their real estate assets like the Grotto, are grossly overpriced due to “cost overruns” and the 2 billion in paper has no redeemable market value to anyone other than government. Like when the NIS brek, government cashes out one of the bonds they hold and uses that money to pay wages etc.

    So the paper Sinkyuh sold the NIS is then bought back by the same government who forced the bonds on them. Once again we the poor taxpayers must pay for the foolishness done. Anyhow I hear he is chairman of some committee on growth for our covid recovery. I feel dat is a rumour though.

    Lord if it wasn’t so sad it would be laughable.

    Like

  • @ Bajan in NY May 19, 2020 2:45 PM

    What’s the problem?

    You sell the stocks in your portfolio at the beginning of the crisis and enter the market again at low prices. This doubles your profit: profit from the initial increase and profit from the crisis.

    In every crisis lies a great opportunity. You just have to use it.

    Like

  • @John A

    You may recall early in the Prime Minister’s tenure she fleetingly referred to the state of the NIS fund. In summary she expressed some concern about next steps. Over two years and we are none the wiser government’s plan for the fund.

    Liked by 2 people

  • Tron
    May 19, 2020 12:16 PM

    Now that I agree with. Preventing pension funds and individuals from investing internationally has to be one of the most authoritarian, shortsighted and dastardly measures ever foistered on the good people of Barbados.

    It put the funds at the disposal of a few, now the many have to input more.

    Dastardly is really the word.

    Like

  • Marshall warns of changes to NIS

    HEAD OF THE Sir Arthur Lewis Institute of Social and Economic Studies at the University of the West Indies, Cave Hill, Dr Don Marshall, says the national retirement age could move from

    from 67 to 70 years old. (FP)

    by COLVILLE MOUNSEYBARBADIANS ARE BEING WARNED that the recent run on the National Insurance Scheme (NIS) due to the precipitous fall in the employment numbers as a result of the COVID-19 pandemic could result in people having to pay more in contributions within the next five years.

    Additionally, head of the Sir Arthur Lewis Institute of Social and Economic Studies (SALISES) at the University of the West Indies, Cave Hill, Dr Don Marshall, is putting citizens on notice that the setback from the health crisis, coupled with the country’s anaemic population growth rate, would also likely result in the national retirement age moving from 67 to 70 years old.

    “It would likely result in a combination of us having to pay more money in NIS contributions, a turn to private pensions plans to prop up the national social security system, and working until you are 70 years old. These are things that are staring us in the future, although there are dynamic countermovements to the notion of work until you drop.

    “It is the view of the International Labour Organisation and the United Nations that it makes more sense in scenarios such as this to ask workers to pay more and supplement with private pension schemes, rather than ask them to postpone their retirements,” said Marshall.

    Last week, Prime Minister Mia Amor Mottley revealed that up to that point, 36 482 people had applied for unemployment benefits. She said the pressure on the fund was likely to be lessened as Government continued with its phased reopening of the economy.

    Mottley also gave the country a cursory glance of recent findings of the Population Commission, which showed that Barbados’ population had been on the decline since 1920 and the country was about 70 000 people short of where the population numbers should be.

    Hard enough

    However, Marshall contended that the quandary of just how to sustain the country’s social security net without adding more hardship on the backs of Barbadians was tough enough without the added challenge of strategic population increase.

    “These problems are nothing to ignore because even without the population

    growth factored in, one can see that we have had to make a run on our NIS because of the crisis that we face with COVID-19. We could already see that the actuaries would have to come back to us in another year’s time to tell us the true impact of the pandemic on the NIS. We have more than 36 000 that have had to access the fund, and that is an unusual event.

    “This has to be addressed very quickly, [otherwise] if not, the persons who are between 45 and 55 might find that they don’t have a secure future in terms of their pension,” he said.

    Well managed

    The silver lining, he noted, was that the evidence pointed to a well managed NIS over the last three decades, which had kept the threat at bay in the short term. As for Barbados’ population growth issues, the SALISES director explained that the country was not faced with the typical underpopulation concerns. He pointed out that while Barbados was indeed underpopulated in the rural areas, the urban districts were some of the most densely populated in the world.

    Marshall therefore suggested that Government establish cities in areas such as St Philip and Speightstown, St Peter, in order to reduce numbers in some of the more densely populated areas. He also noted that CARICOM now had to fast-track its free movement initiative, while Barbados must position itself as a preferred destination for remote working in the new normal reshaped by COVID-19. “The population report reminds us of the need to factor in certain types of dynamic when we are looking at modernising the Barbados economy.

    I am confident that the movement of people within the region will help to sort out some of these dynamics, and we have to have a serious conversation in this country about how we see others coming into Barbados. Residual xenophobic or other kinds of similar reactions have to be seen as backward,” he said.

    Like

  • @ David May 20, 2020 7:20 AM
    “Marshall therefore suggested that Government establish cities in areas such as St Philip and Speightstown, St Peter, in order to reduce numbers in some of the more densely populated areas.”
    ++++++++++++++++++++++++++++++++++++++++++++++++

    What kind of “cities” is this academic referring to?

    Is he prepared to recommend to the government the reallocation of its offices from the new ‘city’ at Warrens to these proposed ‘rural’ cities in an environment where ICT (including working from home) and AI are the order of the new world of work?

    How about the regeneration of Bridgetown and improvement in its housing stock and amenities to make it a much more attractive ‘city’ to live, to work and play in?

    Isn’t this what Hal out of the UK has been proposing for years?

    If Barbados needs a larger population for the future how about getting that 70 to 80 % of graduates from the UWI and other universities to make ‘more’ babies to help defuse and indeed diffuse this so-called demographic time bomb?

    Not a mention of those 75,000 (and growing) ‘Voluntar[il]y Idle’ aka long-term unemployed souls still of ‘working’ age!

    Don’t these people ‘count’ any more?

    Like

  • Nothing of substance at all from Mr Marshall. Are there no experts left on the island?

    Someone of the likes of AC Herbert should be weighing in on this matter not a 3rd rate management lecturer.

    Like

  • @ David

    Yes we were promised the NIS would be addressed but if it was then they would have to do something about it. So in true bajan fashion we going left that on the back burner for now.

    Like

  • @ Miller

    Thanks. This is not the first time that Don Marshall, either by accident, design or coincidence, has been pirating my ideas as his. I remember a few years ago he fronted a radio programme and suggested the idea of getting rid of the BDF. The only problem is that weeks before I had made the same suggestion in my Notes….Don was on my distribution list. I have been calling for the creation of a new town in the East of the country, either Six Roads or Four Roads (preferably Six Roads) and one in the North, reducing the flow of traffic in to the City every morning, moving some state jobs, including the Transport Board, to this areas and incentivising some businesses to move branches or head offices to those new town. It is not rocket science. I also suggested compulsory savings, which the Mottley government now is proposing. No doubt they thought it up all by themselves.
    It is this intellectual dishonesty that I cannot stand. It is part of what I call the Bajan Condition, a Barbadian reluctance not to attribute ideas and policies or admit someone else got there first.
    By the way, where is @Mariposa?

    Like

  • On the matter of birth rate. Govt can easily introduce policy to incentivise persons into having more children and lower the cost child rearing. There is no need for this frenzied rush to import foreigners into the island.
    Things like free or heavily subsidized day care, longer maternity leave with full pay, tax breaks or good ole fashioned cash incentives would get the birth rate up pretty quickly.
    This is fairly basic stuff and there are ample countries from which the govt can gain insight.

    Like

  • ” allowances for newborns that, after amendments, paid women C$500 for a first birth, C$1,000 for a second, and C$8,000 for a third and each subsequent birth”

    Like

  • @Dullard
    it seems to me this Govt has a plan re- importing people to boost their pop aims. their revelations about the future impact of less people coming into the work force is less a warning and more an intention to act, cos they know it is cost prohibitive for bajans to have more than 2 children.

    we have been talking about this issue for decades now and successive govts havent put anything in place to incentivise bajans to have more children. in fact the opposite is true. therefore logic dictates they have another plan.

    the BLP from around the period of Tom has always dreamt about making Bim more cosmopolitan looking – i believe those were Tom’s words.

    i wonder from where they will get the people to import? china, Philippines, eastern Europe, Indonesia or Africa?

    Like

  • 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.

    Like

  • @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’.

    Like

  • @ 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.”

    Like

  • NorthernObserver

    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

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  • 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?

    Like

  • 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?

    Liked by 1 person

  • 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!

    Like

  • Safety net may come

    NIS looking into new scheme for self-employed

    by SANKA PRICE

    sankaprice@nationnews.com

    © 2020. Printed and published by THE NATION PUBLISHING CO. LIMITED. This publication should not be copied in whole or in part without the explicit permission of the Publisher. Tel. 246-430-5400

    • Making it much easier for SEPs to pay

    UNEMPLOYMENT BENEFITS FOR self-employed people could become a reality.

    The National Insurance Scheme (NIS) has asked its actuary to investigate how this could be achieved and the costs, in light of the dislocation and suffering caused by the COVID-19 pandemic.

    The initiative would also ensure the national social security safety net assists more people in any future disaster.

    NIS chairman Ian Gooding-Edghill said that with about 24 000 self-employed people (SEPs) working prior to COVID-19, the group is one of the largest but only about 12 per cent (2 880) made contributions.

    “Essentially, we are looking at a replacement allowance for SEPs whose businesses have ground to a halt as a result of a natural disaster or a pandemic. We are looking at a fixed income replacement and replacement income tied to insurable earnings,” he told the DAILY NATION.

    “The NIS is working on three specific aspects of self-employed persons’ participation that will permanently enhance their safety net – both when they retire and should there be a catastrophic event such as a hurricane or pandemic that results in the suspension of income for an extended period.”

    Gooding-Edghill said that plan included: contributions without any forms but through online direct deposit, Internet banking, EZPay and the Barbados Revenue Authority;

    • A new system where SEPs can pay as much

    as they want and whenever they want, based on certain annual targets.

    • A new fund into which SEPs could

    receive unemployment benefits under specific circumstances.

    Best way forward

    The chairman said in the next few weeks the actuary would hold discussions with leaders of organisations that represented the self-employed to devise the best way forward. After this process, a final report would be presented to the NIS board for review. If approved, the board would make a recommendation to the Ministry of Finance to

    create this new benefit type. He could not give a specific date when the NIS was looking to start the programme.

    Reminding that the NIS was designed for employers to contribute on behalf of workers, Gooding-Edghill said the move was imperative given the significant changes in the labour market and the manner in which employment trends were evolving.

    “Earlier this month, the Prime Minister

    announced a $1 500 per month income support

    for April and May, respectively, for the 2 880 SEPs

    who contribute to the Scheme – approximately $8.6 million. That money, which will be paid shortly, recognises those SEPs who dutifully pay contributions, though such a benefit is presently not included.

    “It will take a while to build up substantial reserves, but once SEPs contribute to the fund, they would be eligible for the replacement benefit income. This would be a good level of benefit adequacy and income protection for them,” he added.

    The Government backbencher said that unfortunately, SEPs had never been covered for unemployment benefits and this was cited by some as a disincentive to contribute to the Scheme.

    He said many felt they could save better on their own; some said the contribution was too high; others did not see the value of the benefits being offered, especially when they were young; while another set had difficulty contributing in that they must keep records, complete forms each month and go to the NIS office to pay.

    Gooding-Edghill said by the time the new benefit was worked out, provision to pay contributions online should be in place as the NIS was actively pursuing this.

    Like

  • 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.

    Like

  • @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.

    Like

  • @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?

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  • @ 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.

    Like

  • @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.

    Like

  • NorthernObserver

    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.

    Like

  • @ 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.

    Like

  • NorthernObserver

    @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.

    Like

  • @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.

    Like

  • @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.

    >

    Like

  • NorthernObserver

    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.

    Liked by 1 person

  • 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.

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  • @Dullard

    That is what the audit house contracted under previous government shared. You can also peruse auditor general reports.

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  • @ 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.

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  • @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?

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  • @ 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?

    Like

  • @Dullard

    A simple process like reconciliation of pension payments issued and paid is/has been a challenge.

    Like

  • @ 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.’

    Like

  • 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.”

    Like

  • @ 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?

    Like

  • 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?”

    Like

  • 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.

    Like

  • 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.

    Like

  • @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.

    Like

  • NorthernObserver

    @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.

    Like

  • @ 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.

    Like

  • NorthernObserver

    @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?

    Like

  • NIS GETS TOUGH

    Chairman says agency going after employers not paying up

    By Sanka Price

    sankaprice@nationnews.com

    The National Insurance Scheme (NIS) is going after employers who are deducting contributions from workers’ wages and not paying them in. They may also name and shame employers if that is what it will take to make them pay.

    NIS chairman Ian Gooding-Edghill said this dishonest practice has been going on for years, but because of COVID-19, scores of laid-off workers are being disadvantaged and have been unable to receive unemployment benefits and other claims. This, he said, cannot be allowed.

    “Too many hardworking people are suffering today because of this. They continue to blame the NIS but the NIS will no longer continue to accept blame for such unreasonable actions by those guilty employers,” said Gooding-Edghill.

    He added that the non-payment of contributions by employers also impacts all NIS managed funds including the health levy which is used to maintain the critical operations of the Queen Elizabeth Hospital.

    The chairman said the NIS administration is gathering the names of the employers and companies who appear to be doing this based on workers’ complaints, and very shortly their compliance officers would be going out to these people seeking payment.

    Those targeted

    He said that information would detail those employers who over the past 12 months have failed or refused to pay any NIS contributions. It would also highlight delinquency periods whether three, five, seven, ten years or more and the amounts that remained unpaid. That report, he said, would guide the board in its revenue recovery strategy to take critical tactical steps to recover funds and other assets for the NIS.

    “We are not yet in the practice of naming and shaming and therefore we are extending the hand of cooperation to those delinquent employers. If that fails, then we will have to act in the best interest of the fund and its contributors as required by law,” warned Gooding-Edghill.

    He added: “The simple message is that the board of the NIS wants the cooperation of those employers to arrange a payment schedule to regularise and bring the outstanding payments up to date. We will work with all employers on payment plans and if employers have difficulties they should contact the NIS management to make satisfactory arrangements. But this must not be taken as an excuse to continue their lax attitude towards their required payment to the NIS. This will be done through the vigorous pursuit of offenders by our compliance officers.”

    Those are not the only unscrupulous employers the NIS is targeting.

    The other group includes those who get around their employees finding out that they’re not paying in their deductions by submitting their business’ monthly earnings reports to the NIS which list employees by NIS registration numbers by a company, detailing the insurable earnings for the four-week period in any month, together with the contribution income statement for contribution to the various funds managed by the NIS.

    The NIS usually uses this document to expedite the payment of any claims and would normally collect the workers’ contributions afterwards from the employer. However, after submitting the report, some employers refuse to pay in the money.

    “In any given month, based on the earnings reports submitted, the NIS could accrue $50 million in contribution income but only get $35 million in cash. The significant shortfall of $15 million a month amounts to $180 million per year. If this unacceptable practice is allowed to go on unchecked, for example, five years, it would cost the NIS $900 million.

    “I have been advised that in some cases this deplorable practice has been ongoing for more than five years. This is unfair to workers and other employers who faithfully continue to pay their contributions, even if they have had challenges,” said Gooding-Edghill.

    The chairman, who is the St Michael West Central MP, explained that “although some employers are not paying the employee and employer contributions, the NIS continues to pay employees’ benefits as long the earnings reports have been submitted by the employer because our policy has been not to disadvantage workers.

    Not workers’ fault

    “Therefore, if contributions have not been paid by delinquent employers, but the earnings report is submitted by the employer, the worker continues to receive all eligible benefits from the NIS such as sickness, unemployment, employment injury, maternity, and so on, at the expense of the national insurance funds. It is not the fault of the workers and therefore they must get their benefits. However, this has implications for the fund because the NIS continues to pay out millions in benefits to workers whom, through no fault of theirs, don’t know that their employers have not paid contributions on their behalf,” said Gooding-Edghill.

    He said though the fund is very strong with over $4 billion, COVID-19 had demonstrated how an unprecedented emergency could occur and the NIS would be needed to respond immediately. Therefore, going forward, everyone must comply with the law or suffer the consequences.

    “The board is resolute and determined that it will not allow any company, shareholders or individuals to build-up their personal wealth and riches at the expense of the NIS,” said Gooding-Edghill. He further noted that the NIS board last week agreed to set up a sub-committee headed by member, Leslie Haynes QC, to review the board’s compliance strategy. That sub-committee will be authorised to take all appropriate decisions supported by the board to enhance compliance.

    “This is the beginning of a new era for compliance management and action,” stated the chairman, who noted that the present Government was setting the example by paying in contributions in cash, unlike what obtained in the past when the Freundel Stuart-regime amassed arrears of more than $400 million.

    Ian Gooding-Edghill, chairman of the National Insurance

    Board. (FP)

    Like

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