After viewing the entire NIS panel discussion via an online media platform (including the Minister’s opening remarks) on Aug. 30, 2023, four things were concluded. They are as follows:
- Reform is needed.
- The proposals greatly impact people between the ages of 16 to 59 years old. No one will be exempt.
- The only changes that are firmly in the pipeline are the ones that increase the contribution rate, increase the pension age (reduced age and full age), and mandate self-employed and informal sector workers to pay into the NIS, according to the Minister of Finance.
- This “public discussion” was a farce and just a formality. Only 9% of the four-hour NIS session was dedicated to fielding questions and comments from the public. The responses to some of the questions were vague and evasive, which was very disappointing.
Questions that should be asked after the end of that session were:
- How can such an important topic be allowed such insignificant time?
- Didn’t the Director of NIS say that the public’s opinions matter, or was that just for show?
You know and judge people by their actions, not just their words.
A lot of persons from SVG and other Caribbean countries reached out to me and shared their sentiments as to their dissatisfaction with the amount of time allotted for the question/comment segment. These are some questions or comments that could have and should have been asked or raised if more time was allotted to hear the public’s views.
- If the fund is sound until 2033-2036 and the 12th actuarial review is expected to be completed by October or November of 2023, isn’t it more prudent to publicise these more recent findings in addition to the NIS 2022 annual statement so that all stakeholders could have a clearer picture of where we are financially and therefore make changes relevant to the most recent findings in 2025?
Remember, we are financially sound until 2033-2036. Surely, waiting another year with more recent and accurate information (post-COVID-19) is a more prudent option.
- When will the law be amended to allow the SVG Public Service Union and SVG Teacher’s Union to select and present to the Cabinet who they want to represent the employees’ interests on the Board of Directors?
The NIS Act could be quickly amended to reflect this change.
- According to NIS staff, one has to get the permission of the Director to get the 10th actuarial review. Why isn’t the 10th actuarial review online for public viewing, like the 11th actuarial review? Is there something to hide?
- Would the investment committee that is comprised of five members from the NIS Board be changed as recommended by the actuarial review?
Would two non-board members (with business, investment, and financial skills) be selected to replace twop board members as mentioned in the review?
Who made up the investment committee during the period of the 11th actuarial review? Are they still there? Remember, this was listed as a high priority.
- Why were 17% of the reserves not earning any income and just sitting there idly?
The actuary said 17% was too high of a percentage to be uninvested. The actuarial review indicated that there are too many assets that are invested regionally, and more should be invested internationally to generate better returns. Just recently on the WEFM radio programme, one of the actuaries indicated that regional markets are not as lucrative and dynamic as the international market.
- Does the NIS sanction the use of funds for social programmes that do not generate a financial return?
What percentage of the fund, contribution, or investment income is set aside to do this? What is the investment or funding policy regarding this? Is this policy made public?
- How much have these non-yielding “social programmes” cost the NIS and thereby resulted in the depletion of funds that could have been invested to earn more investment income?
- What is the NIS exposure to the public sector in 2022? Is it over the 20% prudential benchmark? Local government is 14% in 2021 and 37% for government-controlled or owned statutory corporations, which total 51%. If one subtracts the Bank of SVG (18%), then one is still left with a high 33% of government exposure, which is significantly higher than the benchmark of 20%.
Would funds that are overly exposed and invested in local government and its affiliates be better served by investing in the more lucrative international markets?
- Did administrative fees reduce from 2021?
What is the administrative fee for 2022 in monetary terms?
- What is the return on investment on these staff loans?
What is the amount allocated to staff loans in 2022?
Aren’t financial institutions available for lending services?
What are the criteria to get these loans and advances?
- When will annual statements of securities and investments be made available to the public and/or representative agencies like the trade unions, chamber of commerce, etc.?
- Was consideration given to the fact that increasing early pension age by two years (from 60 to 62) and full pension age (from 65 to 67) could lead to increased poverty and hardship, as 80-85% of pensioners depend solely on the NIS?
What will future pensioners do during that period?
The actuarial review agreed with our reality when it said that a lot of people have low financial savings. Increasing the reduction factor will add infection to where the pain is. It creates an economic infection for pensioners who need their money with minimal disruptions and reductions.
No society can ever truly grow economically, socially, or intellectually if the time for uncomfortable conversations is reduced or minimised. It was truly an opportunity missed for sound and honest questions or debate on an important issue that impacts so many people. So many people looked forward to this presentation with hopes of having light shone on certain things, but it just turned out to be a big disappointment, a big farce and a BIG LIE.
The next opinion piece will delve into and provide some recommendations that I believe will ensure fund sustainability and pension adequacy. Additionally, I will also create a table highlighting some more breakdowns of the administrative expenses of the NIS. Remember all the data will be taken from audited NIS statements from 2017 to 2021. They are NOT BIG LIES, but HUMUNGOUS TRUTHS.
The views expressed herein are those of the writer and do not necessarily represent the opinions or editorial position of iWitness News. Opinion pieces can be submitted to [email protected].