THE National Insurance Scheme (NIS) embodies the future of Guyanese workers, employed and self-employed. It accordingly needs to be considered an important institution by every stakeholder, given that is provides financial protection to the insured and their dependants in times of sickness, death, birth (maternity), injury, disability and pension. Every contributor or dependant, regardless of the size of the benefit, expects that with obligation honoured under the NIS Act, when time comes to receive the benefit, such can be paid.

The investments undertaken by the NIS over a particular period were informed primarily by political considerations, and were conceptualised outside the remit of the NIS Board, which has responsibility for its financial and legal performance. Two such investments that readily come to mind are that of the Colonial Life Insurance Company (CLICO) and the Berbice Bridge Company Incorporated (BBCI).

Although these investments were analysed and criticised by stakeholders and financial analysts when they became public knowledge, the then Board of the NIS and the People’s Progressive Party/Civic (PPP/C) Administration ignored the voices of reason and concern. When CLICO found itself in financial crisis through what some may term bad investment, NIS invested, and lost, $5.6B in that entity, importantly through neglect on the part of Government to carry out its legal oversight responsibility.

In face of this crisis and the threatened viability of the Scheme’s Fund, the PPP/C administration unfortunately failed to act. Has that administration acted to the contrary, it would have ensured the Scheme being placed in a better position to meet its obligations to the contributors, present and past. Equally ignored was a resolution brought in 2009 before the National Assembly, the nation’s highest decision-making forum, calling on Government to execute actions to secure the money lost from this investment.

Coupled with the aforementioned in-actions, recommendations from actuarial reports have been ignored even as the Scheme’s viability became increasingly worrisome. Issues such as increasing contributions and extending the age of retirement, as proposed in the reports, were never allowed to be ventilated and discussed by stakeholders and the public.

On the issue of the BBCI investment, it would be recalled that when it was learnt that the PPP/C Administration had instructed the NIS to make this investment, such was robustly opposed and condemned by persons such as chartered accountant and attorney-at-law Christopher Ram, among others. The Scheme presently receives little return on this investment, even as it is being asked to forego its dividends, since the company is said to be experiencing financial and economic difficulties.

It is no secret that the NIS Fund, as it stands today, is in crisis; and where it remains the nation’s only national safety network, the society can ill afford to have this institution not being able to discharge its economic responsibility.

That the APNU+AFC Administration on Thursday signed a Debenture Agreement with the Scheme for an aggregated value of five billion, six hundred and forty-one million, four hundred and thirty-one thousand, four hundred and seventy-five dollars ($5,641,431,475), representing compensation for the financial loss suffered in CLICO, is making good on the 2009 Parliamentary resolution the PPP/C Administration ignored, and commitment given by this administration to ensure the viability of NIS. This is a bold and courageous act, and will aid assurance that pensions and other benefits that workers look forward to are being protected.

Other areas of crises in NIS are that of non-compliance, and its investment policy. Compliance with the laws on eligibility and payment of contributions, including those of employers who have not been honouring their responsibilities in remitting the workers’ contributions, timely or otherwise, is deserving of laser beam attention and action.

In July, Minister of Finance Winston Jordan made known that a sum of $1.3B is owing to the Scheme by delinquent employers and self-employed persons. The nation has been advised by the minister that the NIS Board will be looking at tackling the matter, and it is hoped that such is done with deserving urgency. NIS Board also has to revisit and frankly rid itself of engaging in investments that are unsound and unsustainable.

And whereas Government’s financial effort must be commended, the NIS as an organisation must move as a matter of import to have an actuarial study conducted, and recommendations arising thereform made public, discussed with stakeholders, agreements arrived at and implemented. Being the past and present major or only safety network for the workers, the Scheme must be protected and made viable.