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The quoted comment was posted to the blog From Private to Public – Cinnamon 88 to CLEARWATER BAY, a concern for taxpayers. It is a nugget of information – see blogmaster’s highlighted text – that has not registered in the BU space, however at this seemingly late stage it is a matter ripe for discussion. To be fair to government the amendment occurred in the light of day however …

The Government response has ‘promise’, and certain bodies, like the Accountant General have much on their plate. Of news to me, was “following the debt restructuring exercise in 2018, the Local Loans Act was amended to remove the 2% sinking fund requirement in respect of the restructured Series Bonds. The sinking funds were then transferred to the Consolidated Fund…”

This was yet another step to aid in the cash crunch, and gave the GoB cash. It also means there is no provision to periodically set aside money (sinking fund) for repayment of the ‘restructured Series Bonds’.

NorthernObserver

The common explanation for the purpose of a Sinking Fund is “a fund containing money set aside or saved to pay off a debt or bond. A company [government] that issues debt will need to pay that debt off in the future, and the sinking fund helps to soften the hardship of a large outlay of revenue. A sinking fund is established so the company can contribute to the fund in the years leading up to the bond’s maturity”.

The obvious explanation to which NorthernObserver alludes is that the government because it is broke ignored the importance of a good financial rule i.e. creating a sinking fund to make paying at maturity of the bonds easier. In other words to mitigate against a default. The biggest irony in this case is that a selected default by the Mottley government in 2018 must have informed the decision to jettison the sinking fund arrangement. Oh what a tangled weave when first we practice to …

The decision to do away with the sinking fund arrangement obviously had the approval of government’s banker. Four years later the government feels confident enough to issue bonds. In the prevailing climate stoked by NIS fear, 2018 restructure and a hostile economic climate, it will be a hard task for the government to convince the most patriotic Bajan to buy government bonds. There is the reminder every decision has consequences.

Here is a copy of the Local Loans (Amendment) Bill, 2018 passed in our parliament on the 24/10/2018.


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172 responses to “Government Jettisoned Sinking Fund Arrangement for 2018 Restructured Bonds”

  1. African Online Publishing Copyright ⓒ 2022. All Rights Reserved Avatar
    African Online Publishing Copyright ⓒ 2022. All Rights Reserved

    Since evabody got a look of INTENSE WORRY on their faces….ah take it all ya will get is NUFF, NUFF…..LYING…..to get outta dat..

    co-conspirators blaming each other for WHAT BOTH DID..


  2. It cannot be denied that both D and BLP administrations landed us in the mess we now face.

    And those who did it will face little of the consequences that we would like them to face.

    Nobody in Barbados can be fooled by the lies. It is time they all came clean and do their best to fix the mess. Unfortunately, no matter what they do at this late stage, the road will be long and hard, not for the them but for the average Bajan. Also unfortunately but for very good reason, there isn’t a lot of trust in our government and so it will be difficult to motivate Barbadians to play the part they would have to play in the recovery.

    However, it is now or never for Barbados.

    How could the average Barbadian feel good working to 72 years old or at least waiting until 72 to qualify for full pension and only ONE pension, after working for more than forty years, when politicians have voted for themselves eligibility at age 50 after two consecutive terms of eight years minimum and remain eligible for two pensions, apparently! ( I stand to be corrected on minor details.)

    These generous benefits, I am sure we would be told, are supposed to ensure that we attract great people for the weighty task of running the country.

    Well…..the country is almost sunk, so…..


  3. @ David

    In the interest of clarity…… I’ve been hearing that it’s being suggested persons should work until 72 years t qualify for full pension.

    Was this suggestion or proposal made by:

    … the Prime Minister or any other Cabinet Minister?
    … the NIS hierarchy?
    … persons at the recently held ‘town hall’ meetings?
    … a caller to ‘Brass Tacks?’

    I’m curious because I read that actuary Derek Osborne proposed the voluntary retirement age could be increased to BETWEEN 68 and 72 years old.

    If the scale of the proposal is between 68 and 72, why are we harping on the extreme, rather than, for example, considering 68, which is one year more than the current retirement age…… in addition to a small hike in the NIS contribution rates?

  4. NorthernObserver Avatar
    NorthernObserver

    “Four years later the government feels confident enough to issue bonds.”
    I think there is a difference between confidence and desperation?
    Attaining additional financing issuing standard forms of Gov’t Paper is easy and inexpensive. And while I appreciate the difference between BOSS+ and Series J, the GoB never really stopped issuing bonds. They are all IOU’s.


  5. First off, the recent BBD debt offerings are mispriced. No way the proffered yields are sufficient to compensate for the implied (and real) credit, currency, political, regulatory and default risks.

    I wonder what the OAS would be on Bdos (B- rated?) debt?

    What would be the implied LGD given the CDS spreads?

    What would be the real market price for BBD credit that defaulted less than 5 years ago?

    Are the economic fundamentals better or worse than when the last default occured?


  6. @Dullard

    More fundamental is when will confidence return to the market to buy government paper. It is the government’s lifeline to domestic financing.


  7. @David

    Personally I won’t invest in BBD govt debt at this time but others may have a different risk appetites.

    Money on the table can work wonders for investor confidence.

    If I were the on the govt side I would see it as simply as offering a higher yield. Yes, it would cost more but that is the price of having a recent default. The local market is captive ie has very little investment alternatives. So beyond and a certain offered yield the public will find it very hard to walk away.

  8. de pedantic Dribbler Avatar
    de pedantic Dribbler

    And to your points @Northern, whether a specific ‘sinking fund’ is ended by statute or otherwise the govt will continue to issue what are most definitely JUNK bonds!

    Of course the true financial definition of ‘junk’ is being facetiously discarded as it’s clear the Barbados govt with its over 150% debt ratio and a revenue ‘stream’ continuously flowing ‘under water’ is in no position to pay these standard yield but VERY RISKY bonds.

    We know other nations have defaulted and re-emerged so we look forward to the same here… but yes @David “it will be a hard task for the government to convince the most patriotic Bajan to buy government bonds.”

    So will the issues be taken up by folks like the NIS and others such … what a ridiculous mess being weaved, is how you or someone else noted!


  9. @Dullard

    Unfortunately this is a reality we have to confront. The confidence is not there. The PM can use her best oratory skills but there is a group in the population who did everything right only to see their nest egg go up in smoke in 2018. Is there a plan B if take up of government paper remains bearish?


  10. Artax,

    It has been proposed by the powers that be as one of the solutions.

    We will and SHOULD harp on it because it is a possible worst case scenario.

    The operative word there is “POSSIBLE”!


  11. As a Bajan who would like to help her country, I have been considering investing in the bonds.

    As a thinking person who cannot afford to lose bigly, I hesitate.

    I cannot afford to lose my money while corruption may still eat the proceeds of the bonds.

    I do not have faith enough that the monies will be wisely used.

    I do not have faith that the bonds will be honoured.

    Similarly, I will not be advising my son to pay national insurance contributions.

    I will advise him to invest in a private pension plan.

    This government got my vote but it still has a long way to go to earn my confidence. No government will ever earn my TRUST.


  12. Putting on my Subject Matter Expert Adviser Banking Hat I would say..
    “Bonds are the safest instruments for investments in times of possible global financial crises”
    “Just ask Global Banks who specialised in Bonds and bought out the world’s largest Global Investment Banks after the Global Financial Crisis”
    “Stocks Can Go Up or Down”
    “Who cares it ain’t my fucking money”
    As Rihanna would say “Bitch Better Have My Money”

    Now I’m putting on DJ Hat..
    Dub From The Ghetto
    Dub Like Dirt
    Chapter of Money

    Money Money


  13. Alan Stanford is probably saying WTF


  14. BOUNTY

    Castles

    Oh, oh, oh-oh-oh-oh-oh-oh-oh-oh, oh-oh-oh-oh-oh-oh, oh
    Hold up, wait a minute
    Baby, baby, are you listening?
    I go and you go
    But I don’t ever wanna see your face no more
    No… second, third chances
    In my hands I hold your life span
    Cause no one does it better
    Keep that shit tight
    Hold it down, stormed the weather

    Now we at a crossroad, now we at the break
    All this back and forth shit, we gonna lose our way
    All I got is one life and one life to live

    You dig?
    You dig?

    If I told you I’m a ride then you know I’m down to drive
    And baby we can do it all night
    And let me help you see the light, yeah

    Your crown just fell apart and you can’t heal my broken heart
    Castles on the sand

    No, no, no, no
    No more, I’m over you
    There’s nothing you can do
    Oh castles on the sand
    Oh no, no, no
    Cancelled plans with my friends
    Not for him, not today
    Castles on the sand
    No, no, no, no
    Dinner dates couldn’t wait
    Hearts will break
    Play it safe
    Castles on the sand
    No, no, no, no

    You know I’m tryna get it
    Make that dollar get your hustle
    It’s you and me
    They know who you are and what you mean to me, yeah
    Late night, long roads
    Tell your secrets I gotcha your heart oh
    Ain’t nobody for you better
    Hold you down, who’s around and stormed the weather

    Now we at a crossroad, now we at the break
    All this back and forth shit, we gonna lose our way
    All I got is one life and one life to live

    You dig?
    You dig?

    If I told you I’m a ride then you know I’m down to drive
    And baby we can do it all night
    And let me help you see the light, yeah

    Your crown just fell apart
    And you can’t heal my broken heart
    Castles on the sand
    Oh no, no, no
    No more, I’m over you
    There’s nothing you can do
    Oh castles on the sand
    Oh no, no, no
    Castles on the sand
    Castles on the sand
    No, no, no, no

    Submit lyrics correction →


  15. The solution is on the table: devaluation of the BBD to 1:4 or 1:5 without initial wage compensation. Our government could then use the new fiscal space to give small gifts to civil servants in the future through modest salary increases. If necessary, our government should devalue further.

    Our lethargic masses have had a sweet life at the expense of hard-working foreign investors since 1966. This must finally come to an end!

    With currency devaluation, we curb consumption and thus waste of foreign currency, drive the masses to godly work and increase competitiveness vis-à-vis the other pepper islands.


  16. Keep an eye on the weather.

    https://youtu.be/C8ZNZsmyh-Q?t=60


  17. The largest drop in GDP in 300 years for the UK. Not since the year of the Great Frost.of 1709.

    About 11 percent!

  18. African Online Publishing Copyright ⓒ 2022. All Rights Reserved Avatar
    African Online Publishing Copyright ⓒ 2022. All Rights Reserved

    The situation is getting worse.


  19. PachamamaAugust 23, 2022 6:36 PM

    The largest drop in GDP in 300 years for the UK. Not since the year of the Great Frost.of 1709.

    About 11 percent!

    +++++++++++++++++++++++++++++++++++++++++++

    If they had control of their sewage they would have breezed trough COVID.


  20. “Some areas across the island are already saturated due to frequent rains over the past few weeks and as a result flash-flood watches or warnings may be required at short notice.”

  21. African Online Publishing Copyright ⓒ 2022. All Rights Reserved Avatar
    African Online Publishing Copyright ⓒ 2022. All Rights Reserved

    Pacha…William…TLSN…..the blurring lines..

    people can’t say they are not being told to WATCH the Negro Judas TRAITORS in the slave master parliaments….voluntary EMPLOYEES of the WEF.

    “WEF Argues For Microchipping Kids

    Human implant technologies will soon become a commodity, a blog post published on the World Economic Forum’s website last week suggests, arguing that there are “solid, rational” reasons for microchipping children with location trackers.

    Kathleen Philips argues that augmented reality technology “has the ability to transform society and individual lives” and despite sounding “scary,” will undergo the same “natural evolution” as wearable tech.

    Philips believes an augmented society is more or less inevitable and that the real question is how it will be regulated. “The limits on implants are going to be set by ethical arguments rather than scientific capacity.”

  22. William Skinner Avatar

    “A permanent, standing oversight committee of both the House and Senate would be a sign of a Barbados that is keen to grow up constitutionally not of a republic gone bananas.”
    ( Barbados Today We’d. August 24th 2022)
    Seems this Banana Republic reference is popping up all over the place.
    We ought to wonder why. It should interest us because bananas could be a pretty successful export crop.

  23. African Online Publishing Copyright ⓒ 2022. All Rights Reserved Avatar
    African Online Publishing Copyright ⓒ 2022. All Rights Reserved

    William…..it’s all a BUST and will BURN TO ASHES…


  24. Johnny
    Stop being so economical with the truth!


  25. Skinner
    Bananas, too many, ate one of the factors associated with metabolic syndrome diseases as well.

    Let’s balance the equation.

    More substantively, where were these people who only now appear out of the woodwork to talk about banana republics?

    Where were these voices when this phenomenon was a central function of imperialism?

    Have they only now awaken from the delusion that Barbados was somehow exempted from this characterization?

    And now that financial imperialism is destined to deliver a faux republic cum banana republic these pleadings of these “johnies come lately” have no resonance here.


  26. Waru
    This society has long suffered from diseases for which these is no cure.

  27. William Skinner Avatar

    @ WARU
    I don’t know we just need to try a bit more. We’re just complaining too much.
    Remember we went through a lost decade and we never complained; we never cussed the government and we certainly never cussed the PM on BU.
    I don’t think any bust will take place. We are going to be okay.
    We must all put our hands to the wheel and stop all of this negativity and beating up on the government
    Let’s all try and lift Bim up the same we did when Stuart was doing bare foolishness.
    We went through that period with no yardfowlism; no accusing anybody of corruption ; no marches; no refusing to participate in the fiftieth year of independence. We know how to grin and bear things.
    Remember how wonderfully we handled Cahill; there was not a single criticism of that on BU. We just allowed the government to work out things. Now, we have to be fair and allow this government to work out the one billion that gone from the NIS. That’s how we do things.
    I think that’s the way to go.
    All of this foolishness trying to pull down Mottley , I think is wrong. We need to treat Mottley the same way we treated Stuart. We never once criticized him.
    So, I don’t agree . Nothing is going to bust.
    We will be okay.
    Peace.

  28. African Online Publishing Copyright ⓒ 2022. All Rights Reserved Avatar
    African Online Publishing Copyright ⓒ 2022. All Rights Reserved

    “Waru
    This society has long suffered from diseases for which these is no cure.”

    exactly…

    ” Now, we have to be fair and allow this government to work out the one billion that gone from the NIS. That’s how we do things.”

    and without BEGGING IDEAS and SOLUTIONS from the victims of those generational THEFTS too…

  29. African Online Publishing Copyright ⓒ 2022. All Rights Reserved Avatar
    African Online Publishing Copyright ⓒ 2022. All Rights Reserved

    Pacha..check out South Afrika….there is movement..


  30. Bu Weather Report Daily Forecast
    ☁☁☁ There will be Black Clouds in the Sky when Waru and William post early morning
    🌞🔅🔆☀⛅🌤🌦☼🌣☉ but it may improve later some with sunshine when other regulars post

    A Message in a Fine Lyrical Style
    [BU sarcasm in abundance aside]
    Black leaders are better than white leaders in Barbados any day of the week.
    BU haters objectors whiners moaners daily bitching is a total bummer and just well wrong

    This couple of tune is to lift up the youths spirit
    and the spirit of youth within you with oldies but goodies

    Living In Love, Lava Ground, I Wayne

    Living In Love / I Wayne
    I love to see my people living in love
    I hate to see them fighting & swimming in blood
    Nuff neglect the farming, the scorning the mud
    Yet they want to be the first to reap the fruit as it bud (OH!)
    They fill the earth with prison, church, and whore house
    Love the rum bar, yet them hate the pure house
    Dem take the microchip and now a wrath a pour out
    Less food, more drought and more mouth (oh)

    Rasta tell dem all the while
    Stop war and go till the soil
    Stop fighting for land and oil
    Fi di coil so many go defile
    Slave master spit inna dem face dem tek dat wit a smile
    Di banks of the nile so mild and so fertile acres more than a zillion mile
    People acting vile pick up cannibal style
    Wah devour mama, papa, and child, (oh)

    Sew life seed it and mek it buss
    Dem sey dem ting dem tek too long fi grow and start to cuss har
    I couldn’t trust some of those as how I trust her
    Such is life, dem say ah just her
    I see Cassia Heights weh dem call di squater land
    Some sey fi government, some sey fi Mathalon
    Still no wan share although dem got a lot ah land
    Dem wan fi turn a gun range and shotta land.

    Rasta tell dem all the while
    Stop war and go till the soil
    Stop fighting for land and oil
    Fi di coil so many go defile
    Slave master spit inna dem face dem tek dat wit a smile
    The banks of the nile so mild & so fertile acres more than ah zillion mile
    The people acting vile pick up cannibal style
    Wah devour mama, papa, and child

    Politician ah talk certain tings dem nah mention
    Sey ah drugs and gun people tax money spend pon
    Come wit plastic smile & dem wicked intention
    Inna ya hand, a where dem put dem evil invention
    Turn gun model seeking attention
    See it deh now ya dead and it is no redemption
    Parents ah wonder where to get the first cent from
    To bury the dirt dem not even got pension

    Rasta tell dem all the while
    Stop war and go til the soil
    Stop fighting for land and oil
    Fi di coil so many go defile
    Slave master spit inna dem face dem tek dat wit a smile
    Di banks of the nile so mild and so fertile acres more than ah zillion mile
    The people acting vile pick up cannibal style
    Wah devour mama, papa, and child

    I love to see my people living in love.
    I hate to see them fighting and swimming in blood.
    Nuff neglect the farming, scorning the mud.
    Yet they want to be the first to pick the fruit as it bud (oh)
    They turn the earth inna prison, church, and whore house
    Love the rum bar, yet they hate the pure house
    Dem take the micro chip and now a wrath a pour out
    Less food, more mouth and more drought

    Rasta tell dem all the while
    Stop war and go till the soil
    Stop fighting for land and oil
    Fi the coil so many go defile
    Slave master spit inna dem face dem tek dat wit a smile
    Da banks of the nile so mild and so fertile measures more than ah zillion mile
    People acting vile, dem pick up cannibal style
    Wah devour mama, papa, and child

    I Wayne – Lava Ground
    Brimstone fire, lava ground (how hot it is, oh, how hot it is, oh)
    De warriors nuh fear no death
    Nor any form of terror, oh
    Pagan did mistake nuh make
    Dey’ll be a sorry dem made an error

    War dem a study, yes
    Say dem deal wit it bloody, yes
    Gun dog and gun drankra dem sen threat
    Dem say senseless killing a dem hobby, yes
    Find out say a war dem a study, yes
    Say dem deal wit it bloody, yes
    Battlefield coulda slippery or muddy, yes
    Deal wit dem rash because dem love di mess

    Dey upon di lava ground
    Nuff a dem a look fi see I mogga down
    Hype an worry a tru dem have gun
    Tell dem say di warriors nah ga run, nah ga run
    Firm upon di lava gorund
    Nuff a look fi see I mogga down
    Hype an worry a tru dem have a gun
    Di warriors nah ga run

    Ice through through di fire, nuh care how hot is
    I nuh weak heart, burn backative
    I saw, the positive.. wake up and live
    Nuff a dem a hype ’bout machine, weh uncommon
    Something weh bigger dan di damn cannon
    Di lightning will dun dem and dem gang
    With one hand, leave dem headless, no foot fi stand on

    Lava ground, nuff a dem a look fi see I mogga down
    Hype an worry a tru dem have a gun
    Tell dem say di warriors dem nah ga run, nah ga run
    Deya ‘pon di lava ground, nuff a look fi see I mogga down
    Hype an worry a tru dem have a gun
    Warriors nah ga run

    Heights ova all and neva fall
    Standing tall, while pagan ah crawl
    Find piece a rope an go hang Saul
    Grab di all, ah take dem jus to bounce against da wall
    How u fi dis di Ras’
    We nuh fear nuh mass, fast ya have to crash
    Di hotta lava splash, dem got dem oil a dash
    Dem make against da lass, oh

    War dem a study, yes
    Say dem deal wit it bloody, yes
    Gun dog and gun drankra dey sen threat
    Dem say senseless killin’ ah dem hobby, yes
    War dem a study, yes
    Say dem deal wit it bloody, yes
    Battlefield coulda slippery or muddy, yes
    Deal wid dem rash, because dem love di mess

    Oh, lava ground
    Nuff a look fi see I mogga down
    Hype an worry a tru dem have a gun
    Tell dem say di warriors nah ga run, nah ga run
    Deya ‘pon di lava ground
    Nuff a dem ah look fi see I mogga down
    Hype an worry a tru dem have a gun
    Warriors nah ga run

    Ice through da fire, nuh care how hot it is
    I, nuh weak heart, burn backative
    I saw, the positive.. wake up and live
    Nuff ah hype ’bout machine, weh uncommon
    Something much bigger dan di damn cannon
    Di lightning will dun dem and dem gang
    With one hand, leave them headless, no foot fi stand on

    Lava ground
    Nuff a dem ah look fi see I mogga down
    Hype an worry ah tru dem have a gun
    Tell dem say fire stone nah ga run, nah ga run
    Deya ‘pon di lava ground
    Nuff a look fi see I mogga down
    Hype an worry a tru dem have a gun
    Warriors dem nah ga run nah ga run, yeah
    War dem a study, yeah (lava ground)
    Say dem deal wit it bloody, yea (nah ga run, nah ga run)
    Oh I see, love Selassie I


  31. ⏪ Rewind Selector

    Nuff Gun Salute in di dance

    Fi di coin so many go defile
    Slave master spit inna dem face dem tek dat wit a smile
    The banks of the nile so mild & so fertile acres more than ah zillion mile
    The people acting vile pick up cannibal style

  32. African Online Publishing Copyright ⓒ 2022. All Rights Reserved Avatar
    African Online Publishing Copyright ⓒ 2022. All Rights Reserved

    Pacha…William….TLSN…the writers mean business…this is the time to STAND UP AND SPEAK OUT…appears all government departments suffer with the same POISONOUS mentality..

    well no one has the times to ACT OUT slaves and sheep parts…..so the many blogs and platforms are FILLING THAT VOID.

    https://barbadosuncensored.com/2022/08/20/beyond-nis-government-against-the-people/

    “Anti-People

    Increasingly, it appears that government, not only here in Barbados but in many so-called democratic societies across the world, are waging war on and against the people who put them in power. That is as topsy-turvy as it can get.

    Such war is often at the directive of some external, global, non-governmental agency such as the WHO or the IMF.

    This systematic onslaught against the people is not necessarily military in nature. On the contrary, two of the most common areas in which this war is being waged against the people are in the arenas of information and finance.

    In the information arena, we experience it in the form of government silence when silence is inappropriate, government propaganda, plain lying, outright deception and various forms of censorship including self-censorship.

    Self-censorship is where someone has vital information but chooses not to disclose it for fear either of victimization or of being taken to court. We suggest that in most cases those fears are unfounded. Too many people are victims of what one sociologist called “learned helplessness”.

    In the area of finance, we experience government’s war against the people with burdensome taxes, mismanagement or abuse of public finance, outright theft of public funds and plain vanilla corruption.

    NIS Fiduciary Responsibility

    The NIS has a track record of malfeasances and anti-customer practices despite its tagline, “More than a contribution…it’s your lifeline“. In 2021 we published two strong reviews of NIS practices and issued the institution with two Customer Disservice Awards. These articles can be found here and here. Our feature image indicates we have issued it with a third Customer Disservice Award.

    Any institution that treats customers with the gross contempt that the NIS has displayed, making people feel they are begging for what is really theirs by legal right (among other contemptuous behaviours), needs to be brought to heel swiftly.

    Therefore, the notion being floated in country: that NIS should be sued, is a step in the right direction. Although this is by no means legal advice, those who will be the plaintiffs in this issue, the people, should pursue the argument that the NIS has broken its fiduciary responsibility.”

  33. African Online Publishing Copyright ⓒ 2022. All Rights Reserved Avatar
    African Online Publishing Copyright ⓒ 2022. All Rights Reserved

    no one got the time except their backward supporters, to play footsie with criminals…


  34. National Insurance Scheme issues
    by Charles Herbert
    Overview
    The topic of reform of the National Insurance Scheme is a large one. This analysis is not exhaustive and deals primarily with the principal long-term benefit of NIS pensions, which is by 75 per cent of the benefit cost.
    By law the NIS Scheme is subjected to an actuarial review every three years.
    The most recent one was undertaken at December 31 2020 and the previous one of 2017 was finalized in December 2021.
    The long-term patterns presented in this report are not substantially different from previous reports except that the fund exhaustion has been brought forward by the depletion of the fund by $1.3 billion. This is a result of national debt restructuring, and the lost revenue and increased benefits occasioned by the pandemic. The broad picture is unchanged from what we always knew and some of the recommendations made, and ignored, are in previous reports: 1) reduce investment in Barbados Government debt (target 40 per cent actual 70 per cent), 2) improve administration, and 3) improve corporate governance and accountability (The last completed audit was in 2010).
    There is no doubt that we need to take decisions and action. Often there is the will to do so only when the crisis looms closer. Some decisions need no debate just action; others have social consequences and need the broadest possible support of all Barbadians.
    History
    The introduction of the NIS in 1966 was a great step for Barbados but it should not blind us to thinking that every aspect of its implementation was ideal. If we do not acknowledge the errors we will not improve for the future.
    The NIS provided pension benefits for many employees that would never have received pensions, mainly transient workers such as artisans and persons employed by individuals or smaller companies. For these it has really been a “lifeline”.
    At the same time:
    A) It was not needed for public sector employees who already had an adequate if not generous pension arrangement; for them (hired before 1985) it duplicated benefits at a cost that the nation could not afford and these benefits will continue to be paid for many years. For post 1985 hires the Government pension is abated and the duplication has been largely eliminated and employees now contribute to a large part of their pension.
    B) For the employees of private sector companies who had pension plans there was no change in benefits but the total benefit now came from two sources.
    C) There was also a category who saved and provided for their own retirement but these numbers are not known.
    For employees in categories B & C the effect was to transfer significant amounts of future savings from private arrangements to NIS control. These funds should have been invested to build private sector businesses and start new ones.
    Unfortunately, most of these funds were lent to Government and new investment was left to foreigners who bought our companies and started new ones. While others were never started. In short, the economy did not grow as it could have and where it did the growth did not belong to Barbadians.
    NIS has traditionally been suspicious of the private sector: A) It trusted employers to collect contributions but not to pay benefits.
    B) It will not report to employers on benefits paid to employees.
    C) I was once told by a former NIS Director that they would never invest in a private sector company because the private sector’s governance was too weak! This requires no comment as NIS has not published an audit for 10 years while our listed companies publish quarterly financial results and audits within 4 months of year end.
    “A” is important because paying benefits through employers is faster and could result in reduced administrative expenses by NIS. Late payment of sickness benefits can be a huge burden on employees.
    “B” is important because it would allow employers to accurately “harmonise” benefits and plan better employment packages for employees. Despite what some think, many employers care about their employees and would like to be able to better plan the “total” benefit package to employees.
    Vague statements are made about outstanding contributions that give the impression that employers deduct from employees and do not pay over to NIS. I would like to see the facts:
    • What proportion of expected contributions is outstanding after one month, six months and longer that one year, and,
    • What proportion of each category are public sector employers?
    I expect that their track record will show that the vast majority of private sector employers pay promptly and have been good partners with NIS, BUT let the facts speak and put a stop to idle speculation! Certainly, all defaulters should be pursued and action taken where possible and written off where not recoverable. This happens in all businesses.
    3. What fixes should not need debate
    Although it is unlikely that the NIS Reserve will grow, there will be Government Bonds that mature, and where not all of the funds are required to pay benefits and expenses.
    These funds available for new investments should be managed by private contractors to invest in local businesses.
    Details such as rules, tenders and removal of low performers should be developed by the Social Partners.
    Improved administration for better records and faster payment possibly in partnership with employers is also not controversial, as is a reduction in the cost of this administration. A reduction from 7 per cent of contributions to 5 per cent would be similar to 0.5 per cent increase in contributions (2 per cent x 21 per cent = 0.42 per cent).
    4. Options that do deserve deep debate
    These are the thorny issues that DO need debate:
    A) If we increase contributions then when should we do it:
    a. Now when earnings are already under strain?
    b. In 2 years after some recovery and in the meantime draw on the Reserve?
    c. Should the increase be split equally between employer and employees?
    d. Should we increase the ceiling for earnings so that higher paid employees pay more?
    e. Should we draw down the fund then contribute at the “pay as you go rate”?
    f. Should we transition in some way to a “defined contribution” arrangement as is popular in Latin America?
    B) If we alter benefits then we should consider alternatives such as:
    a. Longer accrual rates.
    b. Lower benefit rates for higher paid employees while we maintain the safety net for the lowest paid.
    c. Should retirement ages be increased further?
    d. Should retirement ages be held but benefits increased at a later age to reflect increasing dependence with age?
    C) How can we encourage more contributors into the Scheme? We know that many self-employed and contract workers do not contribute and that some number of employers and employees agree not to contribute to so achieve higher net pay and/or reduced costs. This will get increasingly difficult as contribution rates increase.
    D) Do we need to increase our population either through incentives to have more children or through immigration? My own opinion is that the size of the population is not as important as the number of jobs that the economy can support. To have a larger population than there are jobs will not help NIS and will increase all other social benefits and costs. This needs full debate and consensus.
    I do hope that over the next few weeks there will be meaningful national consultation and that the key issues will not be clouded by political mud slinging, “red herrings”, and pontificating that so often overwhelms similar discussions.
    To conclude, my own suggestion is that the NIS sponsor publicised debates on key issues where the panel tries to clearly enunciate the pros and cons of alternative courses of action. The objective of these debates would be to inform and educate the public and not to score political points (perhaps politically aligned persons should be excluded).
    Charles Herbert is a retired actuary. This column was offered as a Letter to the Editor.


  35. “The long-term patterns presented in this report are not substantially different from previous reports except that the fund exhaustion has been brought forward by the depletion of the fund by $1.3 billion. This is a result of national debt restructuring, and the lost revenue and increased benefits occasioned by the pandemic. The broad picture is unchanged from what we always knew and some of the recommendations made, and ignored, are in previous reports: 1) reduce investment in Barbados Government debt (target 40 per cent actual 70 per cent), 2) improve administration, and 3) improve corporate governance and accountability (The last completed audit was in 2010).”


  36. I took the first paragraph to state;
    We knew that at some time the NIS would be facing serious difficulty. The $1.3B depletion made it an urgent issue.

    Must the wheel fall off the bus for people to be informed?

  37. African Online Publishing Copyright ⓒ 2022. All Rights Reserved Avatar
    African Online Publishing Copyright ⓒ 2022. All Rights Reserved

    Said it before and will say it again….

    .NO ONE in their right minds would believe ANYTHING coming from CH..

    won’t waste time or energy reading that RUBBISH…

    ..there are places one can go to get the TRUTH…


  38. @John

    Are you aware this article by Herbert was posted to the NIS blog? The blogmaster thought it to be an excellent intervention.


  39. No.

    Someone sent it to me and I thought it would be a good place to put it.

    Bajans have had a chance to ruminate.


  40. Skinner typical shite talk from you behaving like a ten year old child.When are you going to behave like a big man.You worse than a womanI bwlieve you get up every day to nit pick on every negative you can find about Barbados and feel good doing so.The fact is Mr Stuart and your dems were dismal failures for ten long years.Throw your star boy Mr Thompson into that mix as well did not 8n my view have a clue.They especially Mr Sinckler used the NIS funds like it belong to them and this is largely why the fund is now in serious trouble and now has to be fixed in my view.Therefore your attempt at sarcasm is petty and foolishness.I gone.

  41. African Online Publishing Copyright ⓒ 2022. All Rights Reserved Avatar
    African Online Publishing Copyright ⓒ 2022. All Rights Reserved

    here is another blog post asking for NIS….is that not GOVERNMENT …..be held ACCOUNTABLE for what they claim is mismanagement..

    ..NO…..these are CRIMES committed against the elderly, the DISABLED and everyone who contributes to their future via that NIS fund………which in everyone’s mind translates to A BUNCH OF THIEVES should GO TO PRISON….i don’t care how PRETTY and NONCRIMINAL they try to make it sound…time to FACE REALITY…

    “A Retired Actuary believes the National Insurance Scheme Board must be held accountable for the mismanagement of the scheme over the years.

    Speaking during the Institute of Chartered Accountants of Barbados panel discussion on the topic ‘Our NIS the way forward’ Mr. Herbert said people will be reluctant to contribute to a fund that is mismanaged.”

  42. African Online Publishing Copyright ⓒ 2022. All Rights Reserved Avatar
    African Online Publishing Copyright ⓒ 2022. All Rights Reserved

    btw……..wunnah should be real glad that i HAVE NO SKIN in that NIS SCAM..

    …cause as a disabled person wunnah would be hearing all about it all like now and FOR AS LONG AS I BREATHE….

    yuh culd tank ya lucky stars….

  43. NorthernObserver Avatar
    NorthernObserver

    @WW&C
    Wait….one minute you cussing Herbert, saying no one in their right mind would believe anything he says; and the next you are quoting him???


  44. NorthernObserver August 24, 2022 9:26 PM

    I remember reading a contribution by a BU regular that probably best describes your observation:

    August 19, 2022 7:08 AM, a BU:
    “more shite talk,….always seeing something they want to contradict so they can turn it into SHIT…….copy it and agree with it later…frauds…:”

  45. African Online Publishing Copyright ⓒ 2022. All Rights Reserved Avatar
    African Online Publishing Copyright ⓒ 2022. All Rights Reserved

    “one minute you cussing Herbert, saying no one in their right mind would believe anything he says; and the next you are quoting him???”

    Northern…I did not exactly HUG HIM…..what i did, instead of reading the lotta shite he wrote…..OUTLINED that at the end of the day…..the NIS IS CRIMINAL THEFT…..and should not be treated as merely mismanagement…

    “is that not GOVERNMENT …..be held ACCOUNTABLE for what they claim is mismanagement..

    ..NO…..these are CRIMES committed against the elderly, the DISABLED and everyone who contributes to their future via that NIS fund………which in everyone’s mind translates to A BUNCH OF THIEVES should GO TO PRISON….i don’t care how PRETTY and NONCRIMINAL they try to make it sound…time to FACE REALITY…”

    so no, not believing the BULLSHIT rhetoric….would more ask HOW MANY OF THESE SAME TYPES BENEFITTED FROM RIPPING OFF THE NIS…we know the dead cow clan is one..

  46. African Online Publishing Copyright ⓒ 2022. All Rights Reserved Avatar
    African Online Publishing Copyright ⓒ 2022. All Rights Reserved

    TLSN….this has been going on for DECADES just as long as the farming program has been around…..this modern slavery environment that for just as long people have complained about and the BACKWARD idiotic Caribbean governments CONTINUE TO FORCE THEIR PEOPLE INTO….with no upgrades or changes……useless as usual…

    because at the end of the day, that’s exactly what’s happening…

    thanks for that link.

    of course the appallingly IGNORANT would jump out to try to make a nonpoint……and can’t show where i agreed with Herbert……..yall SHOULD READ FIRST, then READ AGAIN, then do ya LIMITED BEST to analyze…..and reach a sensible conclusion…

    I know Northern knows well what i meant….fire stoker…only succeeded in making them look dumb as usual..

  47. African Online Publishing Copyright ⓒ 2022. All Rights Reserved Avatar
    African Online Publishing Copyright ⓒ 2022. All Rights Reserved

    TLSN…we really gotta start PLACING THE BLAME where it belongs..

    ..Caribbean shite governments KNOW when they send Afrikan descents to these places they get caught up in less than healthy conditions, and oppression….but SEND THEM ANYWAY….

    .they are co-conspirators and collaborators in the disenfranchisement and slave like conditions that Caribbean people experience in some countries…

    ..remember the strawberry slaves from 2020, just the other day, voluntarily recruited by that fraud living in UK and the government although told that it’s modern day slavery, still sent them, and we got the videos months later of the slavery like conditions and social reduction they were subjected to…..so the Caribbean governments are COMPLICIT, DUPLICITOUS in all of it..

    Northern, to continue…and ya done know, since the boatload of weed or was it cocaine?? which turned into weed again, that no one knows anything about but was about to set up a CON MAN from the US to grow weed on their plantation where only Afrikan descents would be the mules/slaves…and got caught red handed…

    ya would gotta be AN IDIOT or just another appallingly ignorant person to believe anything coming from such types…..without using your brain to figure out the scams in and at play..

  48. African Online Publishing Copyright ⓒ 2022. All Rights Reserved Avatar
    African Online Publishing Copyright ⓒ 2022. All Rights Reserved

    I did not post the above an hour yet but look what’s now out there…..on other platforms in reply to the same Herbert post, and this is one of the milder ones…

    “as soon as the cow’s bubbie is running out of milk, the people that helped milked the cow have a lot to say. The only people that will feel the collapse of the NIS the most are the poor people. All of these people talking sh*te set for life. The politicians, the board members, the people that got the free money and ones whose charities got hefty donations, all of them are set!!”

    so apparently it’s well known who have benefited from MASSIVE THEFTS of what is not theirs…

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