GOVERNMENT has disclosed that the investments made by the National Insurance Scheme (NIS), under the former People’s Progressive Party/Civic Administration (PPP/C) have placed the scheme in a difficult financial position.Wrapping up the 2015 Budget debate on August 28, Minister of Finance Winston Jordan noted that the NIS is facing tremendous financial difficulties and finding great difficulties in fulfilling its obligations to the Guyanese pensioners.
“I think that all of us were hurt at the reckless investment by NIS in CLICO resulting in the impairment of over $5.6B of NIS money. Between 2009 to now, NIS has lost $1.8B and as if this was not criminal enough, NIS again made another rather suspect investment in the Berbice Bridge, nearly $1B, for which it is still to collect income,” the Minister informed the House.
Minister Jordan further explained that this has resulted in the Scheme, being in an unfortunate position where it is eating into its capital, to make even the minimal benefits to its contributors. “This cannot continue forever, because if you are going to eat into your capital, the base is going to be less and the income you get from that will be less,” he said.
The Minister advised that the Administration will have to act swiftly in reviewing the operations of the Scheme. This includes looking at the actuarial report that has only been very minimally implemented, to come up with a strategy on the way forward for the Scheme.
“It’s not going to be easy, but it will be a fresh approach and that approach includes entrenching in NIS, whether it is through its laws or whatever mechanisms and the legal aspects itself, to ensure that never again shall NIS be asked to do anything as reckless as it had done over the last five years,” the Finance Minister asserted.
The Minister said that it is the expectation of Guyanese, who have contribute to the Scheme, that they should be able to get their benefits in their time of need. “It is incumbent upon the NIS to be prudent in the investment of our resources, that we are contributing so faithfully every month and over our working life,” Jordan said.
CONSOLIDATED FUND
Given the current situation, the Minister is of the view that under the Cooperative Financial Institution Act (COFA) the financial shortcomings of the Scheme will have to be funded from the Consolidated Fund. (GINA)