The National Insurance scheme is currently owed about $650 million – an amount that is shared almost evenly by the private and public sectors.

This was disclosed on Friday by Director of National Insurance, Ian Carrington, at a press conference to discuss the findings of the just-released 15th Actuarial Review of the National Insurance.

Asked about the amount of the arrears currently owed to the fund, he said, “It’s about $650 million, split almost equitably half and half. Government is about $300 (million), private sector is about another $300 (million) or so.”

The 15 Actuarial Review, which covered the 2012 – 2014 period, noted that at December 2014, outstanding contributions totalled $223.7 million.

(L-R) Deputy Chairman of the National Insurance Board, Wismar Greaves; Social Security Minister Senator Esther Byer Suckoo and Director of National Insurance, Ian Carrington at Friday’s press conference.

Minister of Labour, Social Security and Human Resource Development, Senator Esther Byer Suckoo, indicated at the same press conference that Government was actively seeking to reduce its arrears to National Insurance.

According to her, the revenue-earning measures of the May 30 Budget, such as the 2 per cent Foreign Exchange Fee and the increase in the National Social Responsibility Levy to 10 per cent, were key to improving Government’s cash flow which would put it in a better position to pay off its arrears.

Another option, as outlined in the May 30 Budget, is for Government to engage NIS for a swap programme where existing securities in their portfolios would be re-issued at lower interest rates agreed by the parties. Byer-Suckoo indicated that no consideration is being given to Government not redeeming its debt at face value, which according to the Actuarial Review, would pose a challenge to the Fund.

Carrington noted that such a swap would move a portion of the outstanding NIS contributions to an investment, which would yield returns for the Fund. However, Deputy Chairman of the National Insurance Board, Wismar Greaves, noted while this was a viable option it would impact the cash flow of the National Insurance Fund and consequently its investment activities. Nonetheless, he summarised, “Once the arrears are paid off, the Fund is happy.”

Byer-Suckoo also urged private sector entities to clear their NIS arrears, highlighting the resumption of a three-month programme in October 2017, which would waive the interest accrued on outstanding contributions.

A similar waiver programme was conducted from October 1, 2016 to March 1, 2017 and Carrington disclosed that some 147 employers, most of whom were “very small employers”, took advantage of the opportunity to pay only the principal contributions owed.

“We would have received approximately $11.9 million in outstanding contributions and we would have waived $7.8 million in interest,” he said, adding they expect the upcoming programme to yield similar results.

Meanwhile, Byer Suckoo also indicated that National Insurance is seeking to find ways to stimulate the level of National Insurance contributions from self-employed persons, noting that only an estimated 20 – 25 per cent of self-employed persons in Barbados are contributing to the Fund.

The proposed measures include allowing more flexibility for self-employed persons to pay contributions online, on varying payment dates or in a lump sum at various intervals. Consideration is also being given to allowing self-employed persons to contribute only for a customised package of benefits.

The 16th Actuarial Review of the period January 2015 – December 2017 is due in 2018.

(Source: 15th Actuarial Review of the National Insurance Fund, Unemployment Fund & Severance Fund of Barbados.)

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