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Opposition Leader Godwin Friday holds up a copy of the 11th actuarial review of the National Insurance Fund at a press conference in Kingstown on Wednesday, July 26, 2023.
Opposition Leader Godwin Friday holds up a copy of the 11th actuarial review of the National Insurance Fund at a press conference in Kingstown on Wednesday, July 26, 2023.
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The Unity Labour Party administration failed to implement any of the recommendations of the 10th actuarial review of the National Insurance Fund , which covered the period 2017 to 2019.

The recommendations were intended to help shore up the National Insurance Services, which, if the current situation continues, will run out of money in 2034.

The 11th actuarial review was laid in Parliament this month, becoming the first review of the social security agency that the ULP administration has presented to lawmakers since coming to office in 2001.

The 11th actuarial review contains many of those same recommendations of the 10th review — with added urgency. 

“These results are similar to those of the 10th Actuarial Review and once again show that the Fund is not financially sustainable over the medium and long-term at the current benefit provisions and contribution rate,” the 11th actuarial review says.

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“‘None of the contribution and benefit related recommendations in the report of the 10th Actuarial Review were made during the review period’,” Leader of the Opposition Godwin Friday told a press conference in Kingstown, on Wednesday, quoting the executive summary of the 11th actuarial review

Insights into the reality at the NIS comes as its Executive Director, Stuart Haynes, has warned that reforms are needed by 2024, in order to avoid “draconian measures” such as doubling contribution rates, which now stands at 10% of workers’ income.

The actuarial review calls for urgent action, saying that the National Insurance Fund is projected to be depleted in less than 25 years and that meaningful changes are urgently required. 

“‘Even if all the recommendations made …are fully accepted and implemented by January 2022, additional contribution rate increases will be required to ensure the continued payment of benefits without government support. Policymakers should, therefore, not depend on ‘hoped for’ results but, instead adopt rational responses to the specific challenges that lie ahead’,” Friday quoted the report as saying.

The opposition leader noted that “hoped-for” is in quotation marks, adding, “I wonder where it was taken from.”

The report said that implementing the recommendations “will not be easy for the government to make and for the stakeholders to accept. 

“It is, therefore, recommended that extensive consultations be held with the stakeholders and that the board publish audited financial statements and actuarial review reports during such consultations.”

Earlier this month, Minister of Finance Camillo Gonsalves told Parliament that his government will begin pension reform next year.

Gov’t ‘must take the lead on this vital matter’

Friday said that the government is responsible for the situation at the NIS but is conveniently calling for an inclusive approach to it. 

“Now that there is a mess that must be cleaned up, the all-inclusive approach is recommended to be adopted,” the opposition leader said.

He said that given the great importance of the NIS to the nation’s well-being, the NDP and opposition will play their part and continue to be constructive. 

“That has always been our approach to the NIS, as Arnhim Eustace has taught us to treat the matter with utmost seriousness and sincerity,” he said, mentioning former opposition leader and party president. 

“However, and this is the key thing, the government holds all the cards,” Friday said.   

“Therefore, the government has a responsibility to present its plan for the NIS to the nation. They have repeated actuarial reviews, they now have a report from the World Bank that studied this report, they have had consultations. The time for dithering is over.”

The finance minister has noted that the reform recommended by the 11th actuarial review include NIS reform options include moving contribution rate from 10% to 15%, pension age to 67.

The report also recommends reducing the maximum old age pension replacement rate from 60% to 55%, meaning that rather than receiving 60% of their salary, pensioners would receive 55%.

Friday said there has been “more than enough handwringing by successive finance ministers; and the proverbial can has already been kicked too far down the road. 

“They want to lead so they must take the lead on this vital matter. Our future quite literally depends on it; whether many would descend into poverty or enjoy a decent standard of living in retirement,” Friday said.

‘NIS was run like a hermit kingdom’ 

The opposition leader told the press conference that among the recommendations that the government has failed to act upon is that the review and audited account of the NIS be published on the NIS’ website

“Check the NIS report now and see if it is there,” Friday said, noting that the 11th actuarial review was written on Aug. 31, 2021. 

“If you check today, you will see it is still not on the NIS website. That was two years ago. 

“So, the writers of the review knew that the government had not been making the reports available to the public, they had not been transparent with the public. So, now that the situation is dire, they are urging transparency and consultation,” Friday said.

He said that before now, the NIS was run like a hermit kingdom with no actuarial reports laid in Parliament — as required by law, appointments to the board of directors were “secretive and opaque” and the last audited financial statement on the NIS website was for 2020”. 

Friday called for the actuarial report, as well as the World Bank study of the report and up-to-date audited financial statements of the NIS to be published on its website immediately. 

“People need to know about the condition of their NIS. This is not a matter for the board, this is not a matter for the government. This is all of us who are in jeopardy if this thing is not dealt with effectively.”