est. 2007

Barbados Underground

Bringing News and Opinions to the People

NIS botch

Colin Jordan, Minister of Labour

The contribution by Independent Senator Dr. Kristina Hinds on a plan by government to increase the pensionable age to 68 should be an important issue for Barbadians. It seems in a 2023 too many policy decisions being taken by our respective governments post independence – whether by accident or design – will result in the destruction of wealth and financial wellbeing of a majority Black population.

The government of Barbados needs to have an honest conversation with its key constituent about the current state of the National Insurance Fund (NIF), this includes the laying of up-to- date financials in parliament required by law. Why are educated Barbadians more concerned with ordering with the size of a Chefette roti or the cost of a Swift motor car?

Why did this important legislation had to be amended after a long period of deliberation, consultation and other financial and time related activities? It smacks of incompetence yet again. A key metric of performance of the government by the people must be protecting the financial stability of citizens.

What is the issue we are hearing about this time. Is it the government wants to raise the pensionable age from 67 to 68 now?

See Nation New’s summary of Senator Dr. Kristina Hinds’ contribution below:

Hinds against repeal of legislation

INDEPENDENT SENATOR Dr Kristina Hinds yesterday railed against the repeal of the National Insurance (Amendment) Act 2023 passed just a few months ago and its replacement with the National Insurance and Social Security (Amendment) (N0. 2) Bill debated in the Senate yesterday.

The outspoken senator strongly expressed her objection to having to return to the Senate to debate amendments to a piece of legislation which she said was “littered with changes” and which she contended the Chamber had spent over six hours debating previously.

Several changes

She protested that “we have a number of changes to what we previously discussed on the ninth of August.., not just some commas being removed, some grammatical errors, a few little things being expanded…”

More thorough job

Hinds suggested a more thorough job should have been done in scrutinising the legislation that was now being repealed, as in her view there were many necessary amendments that should have been made at that time and were not, even though they were proposed.

Her expression of what she was feeling about the matter provoked a response of opposition from Leader of Government Business Senator Dr Shantal Munro-Knight who led off the debate, and rising on a Point of Order, called for Hinds’ remarks to be withdrawn.

There was also objection from Deputy President of the Senate, Elizabeth Thompson who suggested that Hinds’ remarks may have been “an attempt to mislead the Chamber” and “disingenuous.”

However, the President of the Senate, Reginald Farley ruled that “the Senate Orders had not been breached.” He cautioned Hinds against proceeding further along the lines in question and allowed her to continue with her contribution.

Not minor

She did, saying: “Thanks to the education that I received in this Barbados, the facts indicate that a whole lot in this legislation addresses that previous Bill that we looked at on August 9 and they are not minor changes. So anybody that is looking to convince me that these are minor changes, obviously believes that because Christmas is coming, that I want to be the thing that Mary rode to Bethlehem…” Hinds also raised questions about the pensionable age, saying she was never in favour of it moving to 68. While she said she supported that section of the legislation that made better provisions for the self-employed to be part of the NIS Scheme, Hinds said: “I am not supported of increasing the retirement age to 68.”

(GC)

67 responses to “NIS botch”

  1. David Avatar
    David

    Unfortunately adversarial politics is a characteristic of the system inherited from the colonial master. All agree it has a polarizing effect.

    Self-employed people, a life saver?

    JUST A FEW WEEKS ago the head of the Barbados Association of Retired Persons warned that very soon 65 per cent of the population would be of pensionable age and eligible for pension in Barbados. But the pension funds are predicted to be awfully short.

    I quote from my article, “The real problem is that as time goes by our population is getting smaller when death rates surpass birth rates and the working population is required to work longer; living standards demand smaller number of children and women demanding their place in the workforce.“ There is no point in looking backward and blaming people for misuse of funds and bad investments. Punishing the opposition will not retrieve money borrowed although we need an opposition voice.

    My mother Gwendolyn Odessa Taylor (Greaves) Russell, was self-employed throughout the 44 years that I knew her. When she learned that I had won a scholarship, she said: “Ah boy, now you can become a doctor and work for yourself.” She had sent me to learn Latin and French when I was nine years old. It was her fault that the love for languages captured me. When I became a banker, she was fairly happy, as I was only continuing what I had learnt at her feet in Bedford Lane and in the shop at Roebuck Street until I left Barbados. That self-employment spirit never left me.

    Self-employed people have to solve their own problems mostly with a little help although sometimes fortune favours the brave. There are selfemployed people who have a steady annual income and there are self-employed people that scratch out a living. Which ones is the Government appealing to? And will the numbers make a difference as selfemployed people will join the ranks of those drawing pension in due course?

    But the real problem arises when self-employed people have no lifeboat and have to depend on the State. Although there is the argument that they have paid taxes, they have not made the specific contribution that entitles them to depend on the state.

    Noble aspiration

    Are we not going around in circles trying to save something that will expire in a few years – kicking the bucket down the road? We cannot make selfemployment illegal. It is a noble aspiration and has produced people of the greatest repute, some of whom went on to become our heroes.

    I am sure that self-employed people are the ones who are constrained to find their own solutions to problems. Perhaps they are the envy of Government as Government has been trying ways for years to find the reason for so many who fall into that category. Now is Government trying to complicate matters?

    Why should it be that self-employed people be the ones called upon to pull us out of a deep hole?

    I am not an expert at predicting the viability of an enterprise but I have some knowledge of assessing risks.

    The combination of low birth rate and an ageing population is toxic in this case for Barbados and bringing self-employed people into the mix only adds to the complication that put us in this mess in the first place.

    There is no clarity in how a reliable contribution is to be made. In any case, where a worthwhile self-employment business is conducted the likelihood is that the business has already made arrangements for a separate pension for management. Remember that self-employed people already have an obligation to pay National Insurance for staff but not for themselves.

    Now the solution. We can have more babies. But according to my calculation, though it will be fun, it will take about 18 years, meanwhile, the pressure on the National Insurance will grow. We can import people. But the question of whether that will benefit us or harm us is debatable. Also we would have to consider if they bring strange ways or beliefs.

    Bringing in a number of people of workable age implies that there are available jobs for both men and women, schools – if they have children – and the ability to access our hospital and health services. (Health services are at present supplemented by imported nurses and doctors).

    This does not seem to be a solvable proposition and self-employed persons need to carefully examine what Government is encouraging them to get into at this time.

    Can we link support for National Insurance from outside assistance including greening? Then Government would not be alone in looking at this vital link.

    Harry Russell is a banker. Email quijote70@gmail.com

    Source: Nation

  2. NorthernObserver Avatar
    NorthernObserver

    Harry Russell is a boss.
    While correct that “There is no point in looking backward and blaming people for misuse of funds”
    As a consummate Bajan, what he has deftly avoided, is HOW this was done.
    It was achieved by flaunting the law.
    It goes back to “I knew man, but I didn’t know”.
    In other words, people knew there was something amiss, they just weren’t sure exactly what it was.
    By the time enough information trickles into the public space, several years have passed.
    I remain astounded as to how many Bajans were not aware of Clearwater Bay Limited. If they missed “Guarantee of Loan Act” in 2011, it may have been mistaken under the “Four Seasons” banner, and all that transpired under that.
    And while the media occasionally spoke to updates, or the lack thereof, over the years; they never sought to focus on Clearwater’s total failure to ever produce a single annual report.
    We, nor the Auditor General, have a clue where those millions were actually spent, beyond planned loans described in the 2011 Act. Even wusser, the project never restarted, even came close to.
    Why should the elected cease this behaviour, if, they can get away with it?

  3. Miller Avatar
    Miller

    @ Northern Observer on December 4, 2023 at 12:27 PM said:
    (Quote):
    By the time enough information trickles into the public space, several years have passed.
    I remain astounded as to how many Bajans were not aware of Clearwater Bay Limited. If they missed “Guarantee of Loan Act” in 2011, it may have been mistaken under the “Four Seasons” banner, and all that transpired under that.
    (Unquote).
    +++++++++++++++++++++++++

    Good comment there about the naivete of the Bajan public especially those in the so-called Fourth Estate who ought to be the watchdog for the people without a LoO in Parliament.

    If the de facto Leader of the Opposition can establish a relationship between the former management of that now liquidated ‘Dirty-water Bay’ company and the fake professor with the affected British accent then Bajans would know why there were never any ‘audited’ financials or any annual reports.

    One never knows what would come out of that investigation since a good sniffer dog might pick up a scent on the trail leading to the $27 Mill @ White Oak Lane.

    But we might be asking too much from that academic fella called Ronnie ‘Y’ and ‘pretending’ to be totally innocent to the real world of Bajan politics with its hidden underbelly of corruption.

  4. David Avatar
    David

    @Miller

    It was reported in the fourth estate last week, Persaud is going to Wash, IDB.

  5. Miller Avatar
    Miller

    @ David on December 4, 2023 at 6:58 PM said:
    “It was reported in the fourth estate last week, Persaud is going to Wash, IDB.”
    ++++++++++++++++++++++++++++

    Then we would wish the self-acclaimed professor good luck in his new role!

    Even our in-house actuary ‘man’ Walter Blackman was brave enough to call a ‘brown’ spade a ‘white-washed’ spade.

    It’s amazing how a simple ‘master’s degree’ in B S can propel a fraud to the top of the heap of crap as long as he or she is well connected with the top political aspirant of similar qualifications.

    Who, then, will be replacing that university-days friend (as chief Finance & Investments advisor) in MAM’s private cabinet of a despot which OSA warned you guys about?

    What about the garrulous Patrick King or even our Bushie’s ‘Up & On’ man Caswell in order to keep his truthful but too-big mouth shut?

    Should we nominate Ralphie T.; as Pacha & Bushie would recommend to become the ‘small’ LoO?

  6. NorthernObserver Avatar
    NorthernObserver

    https://www.iadb.org/en/news/idb-announces-special-advisor-climate-change

    Seems every major multi-lateral group will soon have in a Mia’ite. Wonder if he’ll remain a consultant to Barbados.

  7. NorthernObserver Avatar
    NorthernObserver

    Note Avi’s resume, while extensive, fails to mention his role with Four Seasons.

  8. NorthernObserver Avatar
    NorthernObserver

    Maybe the Miller could spot another Miller?😆

  9. TLSN Avatar
    TLSN

    Wunnah can’t read. It is reported that the Indian was selected after going through “a competitive selection process”.

    If only the big beast “Hal Austin” was still around. I’m certain he would have had something to say.

    Wunnah notice that it’s always the same revolving cast list. Even triple D has given up the ghost.

  10. David Avatar
    David

    He failed to get the CDB job, is IDB a bigger prize or a downgrade. It was obviously his goal to ‘brand’ himself to be able to claim an international posting. His job is done here.

  11. Miller Avatar
    Miller

    @ NorthernObserver on December 4, 2023 at 7:54 PM said:

    “Maybe the Miller could spot another Miller?😆”
    +++++++++++++++++++++++++++

    Of course, the business savvy ‘Dow’ ridge is a major player behind the Bajan political scenes.

    MAM should ‘instruct’ him to use his ‘influence’ in the world of regional finance and insurance’ to bring back to Barbados the registered HQ of Sagicor.

    But we must agree that our boy Charles H is a more committed nationalist than the Miller boy from St. John.

    If only Leroy P, the boy from the Lemon Arbor tenantry, had played his cards like the “B” Miller he would have been the real Money King from the political ‘Arthur’ Seat called St. John.

  12. David Avatar
    David

    No one man has that influence on where Sagicor is domiciled.

  13. NorthernObserver Avatar
    NorthernObserver

    Isn’t domicile and HQ locations two separate matters?
    Isn’t Sagicor domiciled in Bermuda, with HQ somewhere in the US.
    I can only surmise GEL remains here due to an ageing old guard ownership, who refuse the obvious strategic moves.

  14. David Avatar
    David

    @NO

    That is correct. Used the term loosely to Miller at his jab to the other Miller.

  15. David Avatar
    David

    As a responsible opposition political party hoping to climb back into the top of the public’s mind, how does making unsubstantiated positions help?

    DLP says workers forced into new national insurance body; minister’s denial

    Article by Sheria Brathwaite
    Published on
    December 8, 2023

    All is not well with the National Insurance Scheme’s transition into the National Insurance and Social Security Service (NISSS), the Democratic Labour Party (DLP) has charged.

    DLP vice president Walter Maloney claimed that contrary to what was reported to lawmakers last month when the changeover was passed into law, several NIS workers were coerced into supporting the scheme’s transition into a commercial state-owned enterprise.

    Maloney did not substantiate the claim, and Minister of Social Security Colin Jordan described the allegations as “rubbish”.

    The DLP politician told reporters at a press conference on Thursday: “They say to you that almost 95 per cent of the workers agree but what they didn’t tell you is that 95 per cent of those persons were threatened. If you do not sign on you do not have a job. So people wanted employment so they signed on . . . . It was done under subterfuge, that is the harsh reality that we in this country are being faced with. So when we hear the talk about ‘we are going to look after you and we are looking after the workers in this country’ no, [they] are not.”

    Two weeks ago in the Lower House, Jordan said that almost all of the 267 NIS employees agreed to transition and the 20 workers who opted not to move to the new entity entered into discussions with the Ministry of the Public Service on placement elsewhere.

    In an interview with Barbados TODAY, Jordan said no workers were bullied or forced into supporting the move.

    “If I can sum up the [allegations] in one word, it is rubbish,” he said.

    Last Friday after a meeting with staff, Jordan announced in a press briefing that the transition had taken effect.

    “I get the impression that there is a degree of satisfaction and the folks feel that we can move forward and do a good job to improve the service that we offer to Barbadians,” he said then, pointing out that he had other subsequent meetings this week and “got no indication at all that people felt bullied or forced. So in other words, I don’t get the impression that there are people there who have no cho

    ice”.

    Jordan urged social commentators not to politicise everything and implored them to be mature and objective in their commentary.

    The labour minister said: “Don’t mislead on things to grab a headline . . . . National insurance is not one of those things you should do so with. And I call on all the commentators to be mature in their approach to national development and focus on facts; don’t put fiction out there just to score political points. It is an immature approach and I call on those who propagate that kind of stuff to stop it.” (SZB)

    Read our ePaper. Fast. Factual. Free.

    Sign up and stay up to date with Barbados’ FREE latest news.

    Barbados Today firmly discourages any commentary or statements that are libelous, disruptive in nature or incites others to violate our Terms of Use. Any submissions made on our comment section, are solely the views of the individual and not Barbados Today.

    Source: Barbados Today

  16. David Avatar
    David

    Spitting nice sounding words.

    Cox shares effective way forward for NISSS

    By Tony Best

    Day-to-day operational independence, resistance to ministerial interference, clear policy directions and a cadre of efficient and professional staffers and managers.

    Just as important would be a new culture that emphasises professionalism and the flow of accurate financial information to the public.

    These are among the key elements needed to ensure the success of Barbados’ new state enterprise that’s responsible for the smooth and effective running of the National Insurance and Social Security Service (NISSS). That prescription came from Winston Cox, a former Governor of Barbados’ Central Bank.

    “The new state corporation should have operational independence with the Government setting policy parameters and the corporation having staff and management as well as a board of directors who will oversee its operational independence” from the central Government, he said.

    “As a statutory corporation, the NISSS, which is responsible for the distribution of hundreds of millions in pensions and benefits as well as social support systems, will always face the danger of running into actuarial deficits and the challenge of managing those kinds of deficits will be the same whether it is a statutory corporation or a department of Government.”

    Cox, a Caribbean and European trained senior economist, told the Weekend Nation that the model chosen by the Government for the new look would be crucial because it would determine where the new enterprise’s loyalty lies, whether to the Cabinet minister responsible for the corporation or the enterprise itself.

    “Barbados [already] has two distinct corporate models, the Central Bank and the Financial Services Commission represent one and at the other extreme you have the Transport Board which represents another approach,” he said. “What I mean is that the [new enterprise] must have operational independence, one in which the Government sets the policies, and it must have the professional staff and management and a board of directors to oversee its independence.

    “The staff must have the qualifications to carry out the corporation’s mandates,” he said. “The new enterprise is really a financial corporation, and it must have timely reporting, because you can’t make sound decisions in the absence of good data.”

    The former bank Governor was quick to list the emergence of a “new operating culture, one that was different from a Government department to a state enterprise might turn out to be a major challenge.

    As a Government department the National Insurance Scheme (NIS) operated for years within a framework fashioned by the Public Services Commission and the Establishment Department when it came to the recruitment, training and promotion of staffers, but as an independent corporation it would not only be freed from prior constraints but must develop its own methods, said Cox.

    Public confidence

    And that, he argued “would take time”.

    The former bank governor saw the need for greater transparency in its systems while ensuring its approaches were clear and inspired public confidence when it came to reporting of financial information.

    “In addition to the actuarial assessments, I think the new corporation should have an independent accounting firm as auditors which would provide much-needed arm’s length distance from Government that would facilitate timeliness in its financial reports to the Government,” insisted Cox, who warned the current problem of employers collecting people’s money as pension contributions but not transferring funds to the NISSS was likely to continue for some time before it was finally resolved.

    “That’s not going to go away [immediately], but the corporation must resolve it,” said Cox, who believes court action against errant employers was necessary, but it was likely to remain a long drawn-out process.

    He also said “regular consultations” between the newly-minted corporation and employers would make a difference.

    Two weeks ago, Colin Jordan, Minister of Labour, Social Security and Third Sector, who holds Cabinet responsibility for the NIS, told a meeting of the corporation’s staff that about 92 per cent of the NIS staff had agreed to switch to the new corporation and he pledged Government’s commitment to protecting existing staff benefits while ensuring “their positions are improved.”

    He added, “all systems were ready to go” to complete the transition but described the process a “work in progress” while the NIS’s executive management moved to overhaul of some of them to boost efficiency.”

    Source: Nation

  17. David Avatar
    David

    Pension hurdles

    National insurance reform will likely impact private retirement benefits

    by SHAWN CUMBERBATCH

    shawncumberbatch@nationnews.com

    WITH CHANGES being implemented to financially sustain the National Insurance and Social Security Service’s (NISSS) ability to pay retirement benefits, it cannot be business as usual for the private pensions sector.

    That is the assessment of Stephen Robinson, vice-president of strategic projects at Sagicor Life Inc.

    However, Robinson, who was previously responsible for pensions at the insurance industry giant, said there were currently a number of hurdles for the occupational pensions benefit sector, and individuals otherwise in need of private pensions to overcome.

    He does not believe that changes to the NISSS should “necessarily” also lead to reform of the private pensions sector.

    “I do think that there should be encouragement for companies who do not have pension plans to provide for their employees’ retirement in some way. For companies that have pension plans, they should evaluate whether the current design will meet the basic needs of their employees and make appropriate improvements where economically viable,” the pensions expert advised. The challenges he pointed to, however, included the current limited availability of investment instruments for pension plans, and there was now no incentive for Barbadians “to choose a pension investment vehicle over a general investment vehicle such as a mutual fund”.

    “There needs to be greater availability of investment instruments for pension plans. Right now there are very limited local currency investments so that you are driven towards government paper which is not ideal from a risk/return perspective,” Robinson said.

    “The availability of foreign currency for institutional investment as well as for individuals should be considered. Investment return has a significant impact on the funding requirements of occupational pension plans and on the ability of persons to reach their retirement goals.

    “In an environment where Barbados dollar investments are very limited, institutional investors need the ability to deploy capital in foreign currency.”

    He also said “not at the moment” when asked if Sagicor was seeing evidence that more people are investing in private pensions and reducing their reliance on the NISSS’ retirement benefit.

    “There is no incentive to choose a pension investment vehicle over a general investment vehicle such as a mutual fund. In fact, there is SOME OF THE CHANGES to how the National Insurance and Social Security Service administers pensions came into effect on January 1. (GBM)

    ‘Reduction in overall retirement income’ a disincentive due to the current tax rules,” the vice-president said.

    “We have, however, been encouraging people to invest through our mutual funds and in our insurance policies, but as you can appreciate, salaries have been static for many years and prices have been continuously rising especially in the last year. So, income available for investment for most persons has been contracting.”

    Regarding the NISSS proposals, which included the pensionable age becoming 68 in 2034 and pension contribution eligibility being increased from 500 weeks (about ten years), to 750 weeks (about 15 years), Robinson said it was important to keep in mind that these and other changes “are designed to reduce the pension paid to NISSS contributors”.

    As to the impact these plans could have on employerled pension plans, he reminded that there were two types of occupational pension plans – defined contribution (DC) and defined benefit. His view is that there will be some fallout.

    Robinson elaborated: “The DC plan is where each employee puts in a specific amount each month, the employer puts in a specific amount and the funds are invested until retirement. The fund value is then used to buy a pension. Your retirement income is then the pension from your occupational plan plus your NISSS pension plus any other amounts you can get from your savings and investments.

    “You can see that the impact of reducing the NISSS pension leads to a reduction in your overall retirement income. The occupational plan pension is unaffected since the contribution amounts are not affected by the NISSS changes. However, when the employee adds the NISSS pension to what he/she gets from the occupational plan, he/she has less retirement income overall.”

    Given these expected outcomes, Robinson said: “I think we have to focus our efforts towards encouraging persons to invest in their own retirement through financial education. Where the Government can help is through policy initiatives to encourage personal investment and more specifically, personal pensions because if nothing is done we will have multiple generations of elderly persons who are living below the poverty line.”

    On DB pension plans, he noted: “DB pension plans usually have their benefits linked to the expected NISSS benefit. For example, a plan may have a benefit that when combined with the expected NISSS pension is supposed to replace two thirds of an employee’s salary at retirement after a full career as a plan member. “What happens when the NISSS benefit is reduced, is that the pension plan has to pay a higher portion of the pension so that the employee still gets two thirds. This additional pension has to be paid for, so that the pension plan will either have reduced surplus or a bigger deficit. The sponsoring employer then has to put more money into the pension plan so that the plan can meet its obligations.

    “We’ve been through this before in the last NISSS reform almost 20 years ago and the industry survived. It does mean that companies that have DB plans will redo the cost/benefit analysis and make decisions on how to provide pension benefits for their employees. In the past, most companies have closed their DB plans and opened DC plans,” he added.

    Robinson said the planned changes to the NISSS gave insurers like Sagicor an opportunity to have discussions with corporate Barbados on the now greater need to have private pension plans.

    “Employers generally want to help their staff to make good financial decisions and to that end we have seen some traction. We have also been educating individuals on the need to invest and the investment vehicles that are available,” he said.


    Source: Nation

Older Comments
1 2

The blogmaster invites you to join the discussion.

Trending

Discover more from Barbados Underground

Subscribe now to keep reading and get access to the full archive.

Continue reading