Accountants still uneasy about NIS funds
Despite fresh assurances this week that the National Insurance Scheme (NIS) is sound, the Institute of Chartered Accountants of Barbados (ICAB) is not convinced that the statutory corporation is being adequately governed.
In fact, ICAB’s Vice President Andrew Brathwaite said there were a number of issues, though not pressing, which needed to be addressed in order to ensure the fund’s future stability.
Brathwaite made the comments during a media conference at the ICAB’s Hastings office yesterday at the start of Accountants Week.
Brathwaite noted that the association, which is marking its 40th anniversary, had raised concerns about the governance of the funds about two years ago, adding that those issues remained.
“We’ve made recommendations about timely publication of audited financial statements, timely publication of the actuarial report on the fund, the constitution of the board of the NIS and the manner in which the chairman of the board of the NIS is selected.
“So we do share the concerns about the stability of the National Insurance [Scheme], especially looking 20 or 30 years into the future,” said Brathwaite.
“There are also concerns about unfunded pensions in the public sector. So there are a number of issues that are not urgent right now but they are going to very shortly become urgent and we need to start planning seriously as to how we will address those issues,” he added.
ICAB’s Press conference came on the heels of Sunday night’s televised interview by Minister of Finance Chris Sinckler in which he said there was no need to worry about the financial state of the NIS.
Though acknowledging that the island had an aging population and fewer people were entering the workforce when compared to those retiring and calling on the pension fund, Sinckler assured that the NIS had over $4 billion in investments.
However, the immediate past president of ICAB, David Simpson, remains concerned about the fund as well the general state of the Barbados economy.
During Monday’s Press conference, he reiterated his position on Barbados entering into a formal International Monetary Fund (IMF) programme, saying it could be beneficial for the island to go that route.
Simpson acknowledged that there were several different IMF programmes available while pointing out that the island was already receiving technical assistance from the Washington-based financial institution.
However, he cautioned that entry into a formal programme would mean more stringent deadlines and structures to follow.
“So it is not a straight forward thing to just say we need to go to the IMF,” Simpson warned.
“The single advantage that, in our current situation, the IMF would bring is the discipline and structure that is required to ensure that the targets that you have set you do achieve,” he argued, while pointing to Jamaica which has been reporting favourable results since entering into a formal IMF programme.