Government MUST Clear the Air on the State of the NIS Fund, it is Our RH Lifeline


Ian Carrington, Director of Finance

Ten  years have elapsed since the 2008 global financial meltdown left Barbados exposed for the open economy we have been taught it is in primary school. Across the Caribbean our little economies find themselves in the same boat with high debt to GDP and rotting infrastructures, rising corruption and a dearth of leadership.

Barbados WAS considered the gem of the Caribbean.

With all of our problems – some of our making – others caused by the vagaries of life’s existence- the blogmaster is concerned that after five months in office no definitive statement has been formally issued by the government about the current and future state of the National Insurance Scheme (NIS).

  • Is the NIS fund still marketed as our life line?
  • Was it established to provide financial support to citizens in the golden years?
  • Is the knowledge that we have a well managed NIS  fund an emotional comfort for the citizenry?

It appears from all the talk we have been hearing the NIS Fund is under threat. Given the catastrophic impact a failing fund would have on the Barbados society Prime Minister Mottley would do well to schedule another press briefing to lay the issues on the table and outline, what is the plan to stabilize and rescue the fund after it was used as a lender of last resort to add debt like no other time in modern history. To add to the problem, we have been told the former government didn’t pay 400 million dollars in employee deductions to the fund.

The blogmaster has posted several blogs about the lack of management demonstrated by successive NIS Boards and by extension government. The latest Actuarial Review is late (what is new?). Audited financial statements of the fund have not been laid in parliament to comply with the law for many years. Several projects funded by the NIS and decisions taken have been questionable.

  1. Prime Minister we need to know when the Actuarial Review due will be completed or if it was completed when will it be made public?
  2. Prime Minister we want to know when will the audited financial statements be laid in parliament and soon after be made public?
  3. Prime Minister we want to know on what basis Ian Carrington who was director of the NIS fund during the lost years has been given a leading role in the BERT execution in his current role as Director of Finance?
  4. Prime Minister we want to know why Dr. Justin Robinson remains active given his leadership role on the important Boards of the Central Bank and NIS Boards.
  5. Prime Minister we want to know who will be held accountable for the unconscionable squandermania of NIS funds in the last ten years.

In the debt restructure project the IMF document details that:-

NIS: T-bills, treasury notes and debentures. T-bills held by the NIS will be swapped for the new 15-year debenture; and its treasury notes and debentures will be exchanged for a 20- year discount debenture. The debenture will have with a 2-year grace period. Principal will be reduced by 17.5 percent at the issuance of the security; after the 2nd successful review under the proposed EFF-supported program, principal will be reduced by an additional 12.5 percent of the original principal; and after the 4th successful review under the proposed EFF-supported program, principal will be reduced by a final 5 percent of the original principal. Interest will be paid at a rate of 4 percent per annum for the first 3 years, followed by an interest rate of 8 percent per annum for remaining years.

Leading into the last general election the blogmaster had a brief exchange on Facebook with the former Chairman Justin Robinson about when current NIS financial will be laid in parliament- his response did not give hope the matter will be resolved anytime soon.

Prime Minister Mia Mottley you have been a big advocate for transparency AND accountability in government. We waiting to see!

The Caswell Franklyn Column – National Insurance Director Misled the Public About Pensions

Ian Carrington, Director of the NIS

On Sunday, September 3, 2017 the front page of the Sunday Sun carried an item in which the Director of the National Insurance Scheme (NIS) is reported to have said that workers took an inordinate amount of sick leave only to find on retirement that their pension payments had taken a hit. He is then quoted as having said:

I always encourage people not to take sick leave unless they are actually sick. It impacts on the amount of pension you will get later.

The following day I called the Nation to ascertain if anybody from NIS had called to correct those statements. Since no one has done so, I cannot sit idly by and allow such dangerous misinformation to go unchallenged. Not only is it incorrect; it is irresponsible and has potential for devastating consequences.

A person who is sick could believe this report and decide that he does not want to jeopardise his pension. As a result, he might go to work while being ill and become a danger to himself, his fellow workmen and the public. Just imagine a situation where the driver of a public service vehicle goes to work when he is sick because he does not want to lose out on part of his pension and crashes with a full load of passengers.

From my experience, having worked at NIS, I make bold as to say that a person’s pension would only be negatively impacted if he/she refused or neglected to submit claims for sickness, maternity or unemployment benefits.

Any person who is ill, for a period Monday to Saturday and submits a sickness claim, would be entitled to receive monetary compensation, in addition to a credited contribution. Credited contributions count towards a person’s pension entitlement, even though no actual money is paid into the NIS fund. Section 57.(1) and (2) of the National Insurance and Social Security (Benefit) Regulations, 1967 state:

57.(1) For every contribution week for the whole of which an insured person

(a) received, or would but for regulation 4(1) have received sickness benefit; or

(b) received maternity benefit; or

(c) received, or would but for regulation 46(1) have received, unemployment benefit

a contribution shall be credited to that person without actual payment thereof.

(2) A credited contribution shall, subject to the provisions of these Regulations, be valid for sickness, maternity, unemployment benefit and invalidity benefit and for old age contributory grant or pension and shall be equal to the value of the average weekly earnings on which the rate of sickness, unemployment or maternity benefit was based.

In order to qualify for an NIS pension, a person must have 500 contributions. If someone refused to submit their sickness claim, in the mistaken belief that his/her pension would be affected, that person would lose out on some money to tide him/her over a period when not in receipt of income. But worse yet, that person could fall short in the number of contributions needed to qualify for a pension, since no credits would be available to make up the shortfall.

Regulation 31of the NIS Benefit Regulations demonstrate why it is vital to submit sickness benefit claims and accumulate your credits. It provides that of the 500 contributions needed to qualify for a pension, only 150 must be actually paid; the remaining 350 could be credited contributions.

Some enlightened employers pay their workers the full salary and take the benefit when it is paid. If workers qualify for credits in these circumstance, both the employer and employee are entitled to a refund of the contributions paid. This appears to be a carefully guarded secret, the refund is not automatic, you must apply for it.

The National Insurance Fund is primarily intended to pay benefits to people who are insured under the NIS scheme. It is not intended to provide budgetary support to the Government. If they cannot manage this economy without relying on NIS funds, they are in the wrong jobs.

Incompetence at the National Insurance Scheme Costing Taxpayers MILLIONS and Counting

The following was posted as a comment to Another NIS Glitch Affecting the Vulnerable blog by The Watcher.
Dr. Justin Robinson, Chairman, National Insurance Scheme

Dr. Justin Robinson, Chairman, National Insurance Scheme

Without knowing the intimate details of the NIS’s problem, I will speak from a position of authority from my involvement in ICT strategy and implementation and from at least 25 years of experience. Barbados is woefully lacking in the ICT arena. This position of inefficiency comes from a lack of vision on the part of ICT decision makers of which they are really none within the government. Let’s look at the supposed CIO of government, a

lthough that is not his official title. This person, who has been named Chief E-Government Officer can move about from ministry to ministry touting glorious projects which he proposes to perform but has yet to show one iota of value.

One case in point, a government WAN or Wide Area Network, proposes to link all government Ministries, Agencies and Departments (MDA) under a single “umbrella” to provide seamless communication between these parties as well as to manage costs which spiralled out of control as many MDA’s procured their own Internet and in some cases Wide Area Connectivity. This “siloed” approach led to vendors of these services, namely TeleBarbados, Cable& Wireless now LIME and Digicel to a lesser extent, charging exorbitant and disparate rates to MDA’s for the same services. So, the lack of a regulatory framework resulted in price gouging for profit. Unable to bring stability to the services government purchases from these vendors, also led to poor and unstable services being offered to government as many departments opted to “cheap out” and purchase residential DSL services and similar services which in many cases could not handle the demands placed on them by the respective agencies.

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