GOVERNMENTS of Guyana have always evidenced a deep concern for the welfare of the people.  The underlying reason for this is that all Guyanese governments, from the time of independence in 1966, have been managed by political parties which were deeply committed to the humanitarian aspects of the Socialist philosophy, and secondly, because of our British heritage.

One of the best examples of this concern for the people’s welfare was seen when, under the People’s National Congress Forbes Burnham government, the National Insurance Scheme (NIS) was established 50 years ago. This scheme remains one of the enduring legacies of the late Executive President of Guyana.

The NIS was largely modelled on the equivalent British National Insurance and has been widely praised and admired in Third World circles. The offerings of the NIS are many, and central among them is the pension awarded at the age of 60 years.

The quantum of this pension is calculated on two-thirds percentage of the contributor’s last income. In some cases, the NIS pension is higher than the pension that would have been earned by the worker on his or her retirement from his or her normal job.

Then there are several other benefits, such as reimbursing one’s wages or salary during hospitalisation; bearing 80% of costs of prescribed medicines; assistance for the purchase of spectacles and dental work; disability pension; survivor’s pension, whereby a widow could receive a pension based on her late husband’s contributions; maternity leave benefits; and even a contribution towards the cost of a contributor’s funeral.

When the contribution made to NIS each month is compared to the much higher premiums private insurance companies charge for less benefits, it is clear that NIS is offering a value to the population unmatched anywhere else.

For many years, the NIS was financially strong. Its investments were profitable, and its income from contributions was stable and kept pace with expenditure.
And over the years, those who have accessed NIS benefits, and particularly pensions, have been high in their praise of the scheme.

Though the scheme has continued to serve the public with understanding and humaneness and the public still rejoices in it, of recent years there has arisen some disquiet:the ill-advised investment in the Berbice Bridge Company Inc., which last week made headlines with its announced massive toll increases.

In addition, the reserves of the scheme had stood at over $31 billion, and those reserves were not to be touched, except for the purpose of investments.  Now, a small fraction of the reserves is being spent on contributors’ pensions, and for 2018, the scheme is expected to pay out $23.6B as against expected contributor income of $23.2B.
This erosion of the reserves is unacceptable.

To return to its unassailable financial strength, the scheme will have to preserve its reserves, untouched; increase its contribution income; explore profitable investments;  and strictly limit expenditure.

The management of the scheme is well aware of these problems and certainly has plans for addressing them.

There are large corporations and several big businesses that owe the NIS hundreds of millions of dollars. The NIS should try persuasion, as they have always done; but there must shortly come a time when they should repair to the courts to recover their debts.

The other procedure is for NIS officers to unrelentingly ensure that defaulters pay the workers’ contributions and their own at the end of each month. If this is done, it may even help to improve the efficiency of some corporations.

Most importantly, when the actuarial assessment was done half-a-century ago on life expectancy in relation to pensions, receipt of pensions at the age of 60 was considered fair.

Now, however, the life expectancy has improved; people are living longer, and recent actuaries have recommended that the pensionable age should move to 62 or 63 years.  In Barbados, it is 67.  Extension of the age for pension to 62 or 63 should be immediately and seriously considered.

The large majority of the self-employed are not insured; it is largely the wage earners who are and these are mostly persons in government employment.

Small retailers and their staff are generally uninsured; there has been an influx of East Asian businesses and the owners and staff could easily be insured, if the NIS inspectors are diligent and persistent.

More information should be disseminated of the extremely good value NIS offers, and this could sell itself to many small shop-keepers and vendors and fishermen and miners.
The NIS investment portfolio should be constantly reviewed, and opportunity should be taken of any profitable investment which may arise.