SALUTATIONS:

·      Mr. Omar de la Torre, Secretary General, Inter-American Conference on Social Security;

·      Hon. D. Shane Gibson, Minister of Labour and National Insurance and other Members of the Cabinet present;

·       Mr. Vance Teel, President of the American Commission on Organization and Administrative Systems;

·      Ms. Renae Mckay, Chairman/NIB and other Board Members;

·      Mrs. Rowena Bethel, Director/NIB and other Members of Executive Management,

·      Visiting delegates, other distinguished guests; ladies and gentlemen.

Good morning!

For those of you visiting with us from abroad, I extend a warm Bahamian welcome.

I am pleased to have the honour of bringing opening remarks at the start of this workshop on Risk and Resiliency for social security programmes within this hemisphere. It is a very timely topic, particularly in a world that is fraught with uncertainties but, in which, nonetheless, Governments are challenged to make profound adjustments to the very way in which each human being is valued by his society within the context of a fundamental developmental shift.

The new sustainable development goals of the United Nations have set the ambitious target that no one should be left behind. This requires Governments, now more than ever, to alter past governance practices in ways designed to guarantee each citizen basic necessities of life in the way he or she goes about their everyday life, and in a way that meets their reasonable expectations.

One important element is the shift from social safety nets to social protection floors established by the International Labour Organisation as the new benchmark for minimum standards of existence. These social protection floors are the new set of basic social security guarantees which secure protection aimed at preventing or alleviating poverty, vulnerability and social exclusion through programmes that address universal healthcare coverage, income security, nutrition, education and housing needs amongst others.

Against the backdrop of these very ambitious targets, however, countries must grapple with the after effects of the economic crisis; and for smaller economies, the impact of an intensely globalised economy in which the playing field is becoming more uneven. The realities of today’s world are such that generally considerable risks and challenges for resilience are presented for those economies least equipped to handle them. Yet the expectation remains, internally and externally, that ambitious targets of equity and social inclusion will be met at relatively the same pace and degree as the more advanced economies.

A World Bank study looking at pension programmes and social security schemes for 2012-2022, identified three major strategic challenges for these programmes.

The first pertains to addressing the coverage gap, “defined as the share of workers that will not be able to count on any kind of pension income”. Fortunately for our elderly this is not the case in The Bahamas, since from inception coverage under the National Insurance Scheme has been universal and even prior to the introduction of the Scheme there was a system of non-contributory Old Age Pensions which provided a life line of support to many.  The National Insurance Scheme of today covers employed and self-employed. Where persons have made insufficient contributions into the scheme to qualify for a full benefit, he may nonetheless be eligible for a means-tested assistance payment that is paid monthly.

The second strategic challenge identified in the study relates to adequacy. This refers to the relative benefits to be derived from the scheme. This is particularly true for self-employed persons who opt not to pay contributions during their active working lives.

The third strategic challenge, that of financial sustainability, which may “directly impact adequacy when financial shortfalls lead to reduced benefits and partial defaults on pension promises”. Fortunately, The Bahamas has avoided the pitfall of this challenge thus far. In the longer term, The Bahamas stands to face the demographic trend plaguing many larger countries in that the ratio of workers to pensioners is reducing, which may necessitate some adjustments to the workforce dynamics. The Study noted that in a number of countries this challenge has been addressed through gradual increases in the retirement age in line with life expectancy and other factors affecting sustainability. This has to be balanced with the need to provide reasonable employment opportunities to new job market entrants.

There can be no doubt that one of the most enduring legacies that a Government can provide its people is the creation of safety nets that offer a measure of protection during those times when persons are unable, through some form of employment interruption, to earn an income. Secondly, Governments have the traditional role of providing levels of social assistance for those unable to meet minimum needs for the quality of existence expected in a progressive society.

A quick assessment of our national framework will show that The Bahamas has successfully implemented several initiatives that seek to meet these life contingencies:-

1.    In 1974 we introduced a contributory social insurance plan through the National Insurance programme, which is comprehensive in its coverage, covering both employed and self-employed persons. It provides for maternity, sickness, unemployment, invalidity, retirement, funeral and survivor’s benefits.

2.    We provide corresponding assistance payments to those that have made insufficient contributions to qualify for full benefit for sickness, invalidity, old age pension and as a survivor of a bread winner.

3.    In 1974, also, we introduced an accompanying contributory workmen’s compensation scheme covering work related injuries for all workers in the country. It is only the employer that contributes to the scheme. Self-employed persons are also covered. The scheme covers hospitalization as well as income replacement in the form of disability and death benefits.

4.    In 2010 we introduced a national (chronic diseases) prescription drug plan which provides free medicines to specific categories of persons for certain prescribed chronic conditions.

5.    Most recently we have introduced conditional cash transfer programme under the acronym RISE which stands for Renewing, Inspiring, Sustaining, Empowering, and which is administered by the Department of Social Services.

Going further, my Government proposes to introduce universal health care, to tackle the inequities that presently exist within our country with access to affordable healthcare. We recognize that it will take a number of years to fully and comprehensively implement, but it is a journey that must be taken and one which we have started.

As with the majority of countries one of our main challenges today relates to ensuring the sustainability of the National Insurance Fund to meet its future obligations. The pool of contributors necessary to support tomorrow’s pensioners is dwindling.

The cost of medical care under the workmen’s compensation scheme is growing at alarming rates. We see a similar trend in the increase in subscribers to the Prescription Drug Plan.

Notwithstanding a healthy reserve position in relative terms, some $1.8 billion dollars, the sustainability of the National Insurance Fund is at risk due to patterns of employment, particularly a downturn in middle income and higher paying employments in the post financial crisis era. Not only did this impact FDI flows, but the raft of consolidations within the global financial markets plus the adverse targeting of the country’s financial services sector has also taken its toll on our economy.

Compliance levels have historically been a challenge for us, too, but when this is coupled with high usage, some of it fraudulent, then the Fund is unduly pressured.

This situation has been further exacerbated by limited high-yielding investment opportunities within the domestic market that meets the other investment criteria that governs the Fund; i.e. safety and liquidity.

In keeping with international trends, the Government will continue to seek greater opportunities for employment generation, re-training and re-tooling of workers as a strategy to strengthen the National Insurance Fund. This is particularly important as it applies to a rising young population. Through collaboration with other agencies concerned with employment policies, it is intended to more holistically seek to get people back to work as quickly as possible following employment injuries; and to look at opportunities for employment generation.

To tackle the challenges with compliance and fraud, the NIB has invested in a new multi-million dollar IT system that has not only automated many manual processes that are susceptible to abuse, but through collaboration with other government agencies will significantly reduce the time taken to complete processes.

Additionally, with the new system, NIB has created effective partnerships with contributors, who through their personal NIB accounts can alert the Compliance Department to cases of delinquency by past and current employers. We expect the new system to realize appreciable cost savings both in claims processing and also in compliance levels. These achievements add to the ever-expanding transformation of our government services to information and communications technology platforms.

I note from your agenda that you will focus on investments, universal healthcare topics and occupational health and safety issues. I note also that you have a diverse range of experts to lead your deliberations. I certainly look forward to receiving a brief on the outcomes of your meetings as your discussions and the recommendations that will flow from them will serve as the basis for analysis and for strategies and policies to be put in place that will help all of us to reach the goal of putting in place the social protection floor as envisaged by the ILO.

I wish this High Level Meeting every success and I welcome you to The Bahamas.

Thank You!

Source: Bahamas Information Services