NIS books ‘sitting pretty’
BARBADIANS need not fear about the financial situation of the National Insurance Scheme (NIS).
Indeed, the NIS “is sitting pretty because of the profits it is generating from investments in the Government of Barbados”.
This was made clear by Minister of Finance and Economic Affairs, Chris Sinckler, while delivering the feature address at a dinner and awards ceremony over the weekend to toast Standard Distributors’ 50th anniversary at Accra Beach Resort, in Rockley, Christ Church.
He said that the NIS had benefited over the years “from a continuous flow of contributions from workers across the country, which had allowed it, with the benefit of good management and prudent investment choices to become the single largest financial institution in the country with its total assets valued at over $3 billion”.
The Minister of Finance disclosed that “at the agency’s last actuarial review a couple of years ago, the NIS and its fund were deemed to be in a strong financial position and could still service all pensions and other claims if they were to become due for another eight years, even if the NIS were to stop taking one cent from any worker in Barbados”.
He explained: “In the last five years events have occurred to present a more complicated investment environment for the NIS. Firstly, a few years ago, the fund underwent a complete actuarial review from which specific recommendations were made to further improve the contribution intake of the fund while extending the retirement age spectrum from which persons will receive pension payments.
“The net result of these changes meant that the fund is now controlling an even larger surplus than it did before once its monthly commitment is netted off, I believe to the tune of $30 million a month in surplus. Resources which it must find solid investments for.”
Sinckler contended that there could be no question as to the long-term viability of the NIS and called any veiled or direct suggestions to the contrary “disingenuous, and intellectually incredulous, serving only to whip up concerns where none should exist”.
Added to these factors, the Minister of Finance attested that the fund was also confronted by the external economic and financial environment occasioned by weak business performance, volatile stock markets and extremely low interest rates.
“Indeed, while the NIS still makes some returns on its current investments overseas, these are at best flat and with little prospects for significant improvement going forward once the business climate continues [as it is]. So the NIS is left with a relatively large pool of excess resources, but with a reducing range of investment opportunities,” he said. (BGIS)