…expenditure outstrips collections so far this year
…Chairman sounds warning against lax staff

A GROWING benefit population has significantly impacted the National Insurance Scheme (NIS), driving up expenditures that saw the social security agency recording a year-to-date deficit of some $95,368,000.
The scheme collected $13.6B in revenue for the period January to August 2017, but has so far expended over $13.7B for the same period.

The 13.6B accounts for 67% of the $20.2B budgeted by the insurance scheme for the financial year, while the $13.7B in expenditure accounts for 70% of the budgeted $19.4B.
“Therefore, a year-to-date deficit of $95,368,000 was recorded, which was $93,849,000 or 1.6% more than the budgeted deficit of $93,841,000,” General Manager, Holly Greaves disclosed in an address during a general assembly held on Friday last at the NIS Brickdam headquarters, in observance of the scheme’s 48th Anniversary.

“It is projected that by the end of 2017, total income would be approximately $21.4B while the projected expenditure would be approximately $21.1B. This means that the Scheme will collect a further $7.8B in revenue during the period September–December, which will allow us to surpass our revenue target by $1,249,817,000. The NIS is also expected to expend a further $7.4B for the September–December period which will cause the Scheme to surpass its budgetary allocation by $1,266,943,000.” she told the gathering.
It was also pointed out that “benefit expenditure” at the end of August 2017 accounted for $12.5B, a figure that is expected to jump to $19.2B by the end of the year. “It is evident from the analysis that of the projected total expenditure of approximately $21.1B, benefit expenditure represents 19.2B. The Pension Branch – Old Age, Invalidity, Survivors – accounted for approximately 90% of these payments,” the General Manager added, while noting that the pension branch of the scheme is rapidly expanding.

At the end of August 2017, the population of active pensioners stood at 49,466. The rapid increase in the number of active pensioners is coupled with the fact that increases were granted to the Funeral Benefit from $36,725 to $40,398, Greaves said. Meanwhile, the minimum rate for Old Age and Invalidity pensions was also increased from $25,000 to $27,500 per month and all other pensions above the minimum were increased by 4% from January 1, 2017.

“As predicted in the last actuarial review, the Scheme’s growing benefit expenditure has been consistently surpassing contribution income,” she said, but noted that such problems are consistent with a maturing scheme.
“The Scheme has experienced two deficits in the last 10 years. The first occurred in 2011 and the second in 2016. The Scheme has already dipped thrice into the fund for 2017 to pay benefits. It is therefore imperative that the Scheme generate funds in keeping with the growth in benefits,” the General Manager emphasised.
It was noted that the other income earner for the scheme is through its investment portfolio. However, the scheme continues to be faced with low interest rates and no interest from some of its non-performing investments. This situation, Greaves further noted, is compounded by an expanding informal work force.

INFORMAL WORK FORCE
“During 2017, compliance activities have also been affected by an expanding informal work force that is not complying with the National Insurance Regulations. In some cases, there is an increase in the practice of employers to deem workers who are under their supervision and control as self-employed persons,” she complained. The inability and difficulty to cover the majority of the self-employed population, and more so, to even determine the actual population continues to be a burden on the resources of the scheme, the General Manager remarked.
Additionally, poor customer service and the extensive time taken to resolve customer issues have led to public distrust and poor publicity.
“It is therefore necessary at this juncture that formative steps be taken to secure the health and longevity of the Scheme. This requires not only a change in strategy, but also a change in attitude and commitment by all staff to the organisation. In a world where change is inevitable, we at the National Insurance Scheme must refuse to be complacent as individuals and as workers within our organization,” Greaves stated.

TIME FOR ACTION
NIS Board Chairman, Dr. Surendra Persaud, in a very candid address asked a number of thought-provoking questions, even as he challenged the management of NIS and its staff to raise their standards.
“My question today is what was [the] management’s excuse. This I agree might seem harsh, but let’s be honest, where does the buck stop…What is Ms. Greaves to do when she finds that a senior employee has 1900+ unresolved matters on his/her desk, and, thinking that it could not get worse she discovers that over 600+ are over one year old. What should Ms. Greaves do?
“What should the board do when it requests reports for many consecutive months and the employee fails to deliver? What should the Board do when repeatedly, and I mean for almost a year, {it} asks a senior manager to provide a report that does not regurgitate data, but actually analyses and makes recommendation on that data. Please help me understand this,” he asked.
Dr. Persaud explicitly stated that the General Manager has the full support of the Board, as she charts a new path for NIS–a path based upon appropriate performance measures and competence. As he turned his attention to the future plans for the insurance scheme, the board chairman said NIS spends an “unacceptable amount of resources” to collect money and to disburse benefits.

“In the near future this will be completely replaced by electronic transfers. I expect that very soon Guyana will have a digital financial window. A single digital space where all payments to the Government and its semi-autonomous bodies will be made,” he posited.
He, therefore, challenged the management and staff of NIS to further digitise their operations, allowing for a more efficient delivery of the services offered. “I would like to see this completed by the time the 49th anniversary arrives: that 95% of our pensioners receive their monies directly into the bank; that 95% of our pensioners can use digital technology to prove that they are alive; that 95% of our other disbursements are printed on cheques that you can actually deposit into a bank; that 95 % of claims are processed within 30 days; that 95% of payments to the NIS occur electronically.”