Written by Telesha Ramnarine
THE management and board of the National Insurance Scheme (NIS) have pledged to implement more systematic and aggressive efforts to collect hundreds of millions of dollars owing to the scheme by businesses and self-employed individuals.Secretary to the Cabinet, Dr Roger Luncheon reported this yesterday when he addressed his usual post-Cabinet press briefing at the Office of the President in Georgetown. He was speaking about the 44th anniversary celebrations of the scheme.

The authorities have recognised the challenges facing the scheme and staff members have been urged to excel in their attention and attitude towards their work.
Meanwhile, the scheme’s major focus for its 45th year and beyond was identified as data and debt management.
“Records for the period 1989 to 1998 remained the major outstanding source of stakeholders’ frustrations with the scheme, and interventions, including in-house projects and major outsourcing activities, are being implemented to conclude by 2014 the incorporation of the 1989 to 1998 information into the scheme’s permanent records,” explained Dr Luncheon.
So far as debt management is concerned, Luncheon said, efforts would be made from the 45th year onwards to collect those arrears.

ACTUARIAL REPORTS
Asked why recommendations in the actuarial reports have not yet been implemented, Luncheon informed that such recommendations did not find favour with the administration. “Like all other recommendations, they would have to be considered by the authorities, by stakeholders. And on the basis of such considerations, interventions would be made.”
Luncheon, who is also NIS Board Chairman, had issued a statement earlier in which he said the scheme’s 44th anniversary cannot be viewed without mixed concerns by the different categories of stakeholders and decision-makers.
“Even though the spectre of an imminent dire situation is highly exaggerated, the Scheme’s financial viability does evoke apprehension among the informed. Essentially, the Scheme’s expenditure growth is outstripping revenue growth,” Luncheon had said.
Contribution income, the main ingredient of revenue, was G$11.32b in 2012, while benefits expenditure, the main ingredient of expenditure, was G$11.33B.

OVER 43,000 PENSIONERS
Long-term benefits dominate the benefits profile, with over 43,000 pensioners in payment at July, 2013. The aging population, longer longevity has impacted significantly on this growth in benefit expenditure.
Non-coercive methods in enrolling the self-employed have had inconsequential results in population size over the years. At the end of 2012, the active population of the employed contributors numbered 117,219, while the active population of the self-employed was only 8,791.

SELF-EMPLOYED ANOMALY
The self-employed situation of anomaly is evident in the face of the size of the parallel economy in Guyana. Importantly, the contribution rate has seen occasional annual increases in the last decade.
“In the meanwhile, NIS continues to offer a pension indexed to minimum wages in the Public Service, with a wide range of short-term benefits to contributors and pensioners.
The end result is predictable: Expenditure growth exceeds that of revenue. The NIS fund is therefore being used to meet the operational deficits currently being incurred,” explained Luncheon in the statement.
As a result, the NIS fund has failed to show growth over the recent years, as deficits in operational costs have been financed from the savings in the fund. In 2011, the fund was $30,410,427,000, while the 2012 unaudited fund was $30,214,987,000.