Welcome to Bahamas Local, Your Bahamas Online Search Engine

PLP 'DECIDED' ON NIB FUND . . . but we have to wait longer to find out what will be done

Wed, Feb 8th 2023, 08:27 AM
Finance Politics Tribune Stories

AFTER months of deliberation, the Davis administration finally made a decision yesterday concerning the future of the National Insurance Board fund, according to State Minister Myles Laroda with responsibility for NIB.

Mr Laroda told reporters yesterday that the government will soon announce its decision on whether NIB contribution rates will increase or not.
#However, he declined to say what course of action the government intends to take to ensure the fund’s sustainability.
#“That matter has been dealt with at Cabinet. We are at a decision. We have a little bit of cleaning up to do with regards to the decision that was made,” Mr Laroda said before yesterday’s Cabinet meeting when asked by The Tribune for an update.
#“We (will) be coming forth shortly with the direction of which the National Insurance Board would go with regards to the raise in contribution rates and other recommendations that was made in the report that the executive management team of the National Insurance Board has recommended to the government that in their view needs to change.”
# In December, he admitted the government would have to make a decision concerning the state of NIB’s fund, which he said remained on target to lose about $70m that year.
# “The fund is no better, or no worse than the last time we spoke,” Mr Laroda said at the time.
# “The government is going to have to make a decision in the upcoming year as to what its position is going to be as we move forward as it relates to the increase. I think the fund is on pace to lose around $70m plus this year, that’s about $6m a month,” he said in December.
# The Tribune has previously reported about the dire straits of the fund over the years.
# This newspaper exclusively reported in April that the 11th actuarial review of the National Insurance Board predicted the fund could be depleted by 2028.
# That report had reduced the fund’s potential depletion timeline by one year, as the 10th review had made a prediction of 2029.
# It also recommended NIB to increase the contribution rate by two percent and continue increases every two years until 2036, among other things.
# There have been ongoing discussions as to whether government will decide to increase NIB contributions, especially in view of reports that the agency’s board had recommended that they should move quickly to effect the increase in time for January 1, 2023.
# In terms of the average salary of NIB employees, there has also been concern in view of the fund’s dire state.
# An Inter-American Development Bank (IDB) report indicated NIB employees received an average income of $64,000 annually.
# When asked about the report, Mr Laroda said the average staff member’s salary is actually $40,000 at NIB.
# “The executives of which there are 12, the average salary is around $90,000.”
# “Then you have the managers below that. There’s 165 individuals in that category and the average salary is around $58,000. The 460 plus non-management staff is around $32,000.”
# He added: “So for a staff complement of around just probably south of 650 staff members, it’s around $39,000. You could round off to say $40,000, the average staff member salary at the National Insurance Board.”
# After COVID hit in 2020, NIB paid out more than $100m in unemployment benefits to support thousands of Bahamians who were laid off during the health crisis.
# Once NIB’s 13 weeks of payments stopped, the government introduced its own COVID unemployment programme to provide further income support to jobless Bahamians.
# More than $200m was spent on the unemployment benefit scheme by the government by the end of September 2021.
# The number of benefits paid out over the years has left NIB reserves in a state of decline.
# This is because payments have exceeded the incoming contributions since 2016, NIB had said earlier.

Mr Laroda told reporters yesterday that the government will soon announce its decision on whether NIB contribution rates will increase or not.

However, he declined to say what course of action the government intends to take to ensure the fund’s sustainability.

“That matter has been dealt with at Cabinet. We are at a decision. We have a little bit of cleaning up to do with regards to the decision that was made,” Mr Laroda said before yesterday’s Cabinet meeting when asked by The Tribune for an update.

“We (will) be coming forth shortly with the direction of which the National Insurance Board would go with regards to the raise in contribution rates and other recommendations that was made in the report that the executive management team of the National Insurance Board has recommended to the government that in their view needs to change.”

In December, he admitted the government would have to make a decision concerning the state of NIB’s fund, which he said remained on target to lose about $70m that year.

“The fund is no better, or no worse than the last time we spoke,” Mr Laroda said at the time.

“The government is going to have to make a decision in the upcoming year as to what its position is going to be as we move forward as it relates to the increase. I think the fund is on pace to lose around $70m plus this year, that’s about $6m a month,” he said in December.

The Tribune has previously reported about the dire straits of the fund over the years.

This newspaper exclusively reported in April that the 11th actuarial review of the National Insurance Board predicted the fund could be depleted by 2028.

That report had reduced the fund’s potential depletion timeline by one year, as the 10th review had made a prediction of 2029.

It also recommended NIB to increase the contribution rate by two percent and continue increases every two years until 2036, among other things.

There have been ongoing discussions as to whether government will decide to increase NIB contributions, especially in view of reports that the agency’s board had recommended that they should move quickly to effect the increase in time for January 1, 2023.

In terms of the average salary of NIB employees, there has also been concern in view of the fund’s dire state.

An Inter-American Development Bank (IDB) report indicated NIB employees received an average income of $64,000 annually.

When asked about the report, Mr Laroda said the average staff member’s salary is actually $40,000 at NIB.

“The executives of which there are 12, the average salary is around $90,000.”

“Then you have the managers below that. There’s 165 individuals in that category and the average salary is around $58,000. The 460 plus non-management staff is around $32,000.”

He added: “So for a staff complement of around just probably south of 650 staff members, it’s around $39,000. You could round off to say $40,000, the average staff member salary at the National Insurance Board.”

After COVID hit in 2020, NIB paid out more than $100m in unemployment benefits to support thousands of Bahamians who were laid off during the health crisis.

Once NIB’s 13 weeks of payments stopped, the government introduced its own COVID unemployment programme to provide further income support to jobless Bahamians.

More than $200m was spent on the unemployment benefit scheme by the government by the end of September 2021.

The number of benefits paid out over the years has left NIB reserves in a state of decline.

This is because payments have exceeded the incoming contributions since 2016, NIB had said earlier.

Click here to read more at The Tribune

 Sponsored Ads