Government was advised, by an actuary, to take steps to protect the National Insurance Fund because they had calculated that the NIS Fund would be in trouble by 2035 if pensions were continued to be paid at the then existing rate. They reasoned that Barbados was an aging society, and with current life expectancy and a declining birth rate that there would be too few persons contributing and too many persons receiving pensions for the scheme to remain viable. The Government had several options to ensure the fund’s viability, and this is what they have done so far:
Increase the pension age with the hope that more people would die before attaining pension age;
Change the formula for calculating the pension, resulting in a much smaller pension; and
Give people the opportunity to receive a reduced pension if they applied early, and an enhanced one if they deferred applying for their pension. They guessed that there would be a neutral effect on the fund because the people who opted for early pensions would somehow be offset by the numbers who deferred. Unfortunately, hundreds opted for early pensions and less that 10 deferred as yet according to my information.
The corrective measures clearly show that the NIS Fund is under stress. It is inconceivable that the fund is as healthy as the Minister of Finance is telling the country. For the sake of argument let us assume that the Government is correct in their assertion that the NIS Fund is healthy. Then they must also explain why they thought it necessary to sell off the NIS shares in the Barbados Light & Power Company which were paying handsome dividend yearly, and projected to do so for the foreseeable future. If they needed cash so badly that it forced them to sell off assets, how can they justify the gamble of putting $50 million in the Four Seasons apparent white elephant.
Dr. Esther Byer-Suckoo, Minister of Labour and Social Security
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The decision by the National Insurance Scheme (NIS) to retreat from distributing pensions to bank accounts only is the correct one. To inflict such hardship on our most senior of senior citizens reflects a level of uncouthness and inconsideration by those responsible. BU surmises that if Director of the NIS Ian Carrington recommended the change in policy, the Board headed by retired banker Tony Marshall – who reports to Minister Esther Byer-Suckoo – should have blocked the idiotic proposal. It has the smell of Tony Marshall, who possibly rammed it down Minister Suckoo’s throat. Whether it occurred as described or not, it demonstrates weak leadership on the part of the government and in particular Dr. Byer-Suckoo.
It has come to the attention of BU that a few companies in Barbados have been ‘firing’ long standing employees for questionable reasons. The objective behind what BU labels an unethical action is to avoid paying ‘severance’ to longstanding employees. In one case that we know of the person was employed at a St. Michael company for over 20 years. The only reason BU is withholding the name of the company is the reality it would prejudice the matter which is the subject of litigation for the employee involved. Regrettable the role of the unions in the current environment has become redundant. or so it seems.
There is another concern which BU has, here is a scenario:
My partner is rapidly approaching her 60th birthday and she wanted to find out what her options were for retiring (“comfortably”) when she attained that “wonderful” milestone. So with this in mind I went to the National Insurance Scheme (NIS) Office and spoke with an officer. He explained to me that the earliest anyone could apply for an NIS pension was at age 60. However, he said, by the time my partner reaches 60 the official retirement age at that time would then be 67 years.
He continued to say that theoretically my partner could still opt for retirement at age 60 BUT would lose 6% for each year up to the age of 67. Some simple maths would reveal that at that point 42% of the total pension would be lost by ‘cashing in’ early.