$4 billion strong
Minister of Finance assures that NIS is sound
Minister of Finance Chris Sinckler says there’s no need to worry about the financial state of the island’s National Insurance Scheme (NIS), which he describes as sound.
Speaking on state television last night, Sinckler strongly rebuffed suggestions to the contrary, saying anyone who claimed the scheme was in trouble was not speaking the truth.
He further denied that Government was dipping into the fund as if it was “some type of lucky dip”, stating that the NIS bargains with Government “very hard” and quite often his administration has to pay higher interest rates than in the open market.
“The NIS is sound. It has over $4 billion of investments. The last actuarial review, which was completed a few months ago, indicated the NIS should be safe enough for at least the next 25 to 50 years because you do the analysis going out,” said Sinckler.
However, he acknowledged that Barbados has an aging population and that fewer people were entering the workforce when compared to those retiring and calling on the pension fund.
“So therefore, we have to ensure we understand the demographics of what is happening in Barbados with an aging population and people living longer, to ensure we do not have a situation where you do not have enough input, but you have too much output,” he said.
The Minister of Finance further pointed out that the NIS currently earns more than $200 million in surplus from its investments, a significant number of which are with Government.
He noted that the NIS manages such separate funds for severance and unemployment benefits, adding that the severance fund was “very flush and has a lot of money in it”.
However, he said the same could not be said for the unemployment fund.
With the recent spike in unemployment, he said Government, the employers, the unions and the board and staff of the NIS had been examining ways of ensuring that the fund remains viable.
“There are a number of options on the table. Some of them look reasonable, others may have some legal challenges, and we are currently having those examined, but I want to assure Barbadians that we will take decisions to ensure the unemployment fund continues to serve those persons who may unfortunately lose their jobs.
“The goal really is to get those people back in the work force anyway so that they are contributing,” Sinckler added.
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