NIS ‘not broke’, says Dr Byer
The number of Barbadians becoming dependent on the National Insurance Scheme (NIS) is outpacing the growth of contributors, raising concerns about the viability of the scheme. However, Minister of Labour Dr Esther Byer has given the assurance that the state of the NIS is strong.
In an address to delegates attending the 60th annual conference of the incumbent Democratic Labour Party (DLP) last weekend, Dr Byer said that the changing population had presented the fund with some challenges. She explained that the growing aging population, coupled with the fact that Barbadians were having fewer children, had led to a decline in new entrants into the workforce and fewer contributors to the scheme.
However, she said Government had taken steps to remedy the situation by extending the retirement age.
“We have to look at the nature of the Fund . . . we have an ageing demographic [but] we are now at a retirement age of 66-and-a-half, and that was from 2014. [As] at 2018 the retirement age will go up to 67,” she told the partial audience.
Dr Byer emphasized that all the scheme’s accounts – the National Insurance Fund; the Unemployment Fund; the Severance Fund; the Catastrophe Fund; the Sugar Workers Provident Fund; and the Retraining Fund – were robust, with the Unemployment Fund the most troubled among them, blaming “prolonged economic slowdown and the increase in unemployment”, which she said meant fewer people were contributing to that particular Fund.
“When you hear a concern about the National Insurance money it is usually in the area of the Unemployment Fund. But it has been able to meet its obligations so far because of the assets that it accumulated over the years.
“So when you see a recession such as this one you are not too concerned . . . about the fact that we are seeing that dip in the Unemployment Fund right now.”
However she reported that it was beginning to turn the corner, and that it had assets of $71 million and a surplus of $8.3 million.
She added that the return to buoyancy of the Unemployment Fund was being helped by an agreement with the private sector to divert some Severance Fund money into it, reassuring workers that this arrangement would not affect them and that their contributions would remain the same.
Dr Byer said the Severance Fund assets stood at $187 million with a $7.3 million surplus, while the Catastrophe Fund was “performing well” with assets of $48.5 million and a surplus of $2.5 million. The National Insurance Fund, the largest among the programmes, was in “a very healthy state “and continued to provide a “lifeline” to Barbados, the minister stated.
“At the end of July this year, the Fund had assets of over $5 billion. We’re not broke. For the year to date, that fund has a surplus of $181.5 million. [This is] an extremely healthy state,” she stressed.