…Minister Jordan nudges NIS to widen coverage
…wants stiffer penalties, including imprisonment for employers who do not remit workers contributions

MINISTER of Finance, Winston Jordan has urged the National Insurance Scheme (NIS) to put relevant measures in place such as the crafting of a 2020-2029 Strategic Plan and the revamping of its existing legislation to go after employers who do not remit their workers contributions.

Jordan made the call on Wednesday at the NIS General Assembly in observance of its 50th Anniversary. He told the audience that the NIS remains a relevant stakeholder in the social security sector and the wider economy, reminding that it was former Prime Minister Forbes Burnham who conceived the idea which was “grounded in the fundamental right to social security protection”.

Despite the importance given to social security protection coverage, Minister Jordan said that a large proportion of the world still have no access to the same, according to the International Labor Organization (ILO).

This sees some persons having no access to the fields of health, child benefits, maternity benefits, disability or old-age pensions. The minister expressed that he was thankful that such is not largely the case in Guyana as the NIS’ Actuarial Report in 2016 showed that 60 per cent of the country’s employed population is covered by the NIS.

However, pinpointing the need for improvement, he stated: “At 50, it goes without saying that urgent measures must be put in place to improve this ratio, because if employed persons are not registered and the contributions are not remitted, it impedes the objectives of the National Insurance Scheme and the organisation’s long-term sustainability.”

He reminded that research shows that an aging population, low economic growth and high unemployment were some of the contributors to the “widening fiscal deficit” in the NIS.
“It is a known fact that for decades, our teachers, nurses and UG graduates, particularly young persons, planned for their movement to other countries before they graduated. There was also an era in Guyana when individuals, who were actively looking for jobs, were unable to find jobs. These factors significantly reduced the contribution payments, while payment for claims, including pensions, had to be made,” Jordan said.

“I am happy that a reversal of this trend has started…this government has also been placing emphasis on education in the development process, and the reintroduction of free education at the University level is on the cards. These developments will propel growth in Guyana, increase the number of skilled persons in the work force and and reduce the unemployment rate. These conditions provide an opportunity for the National Insurance Scheme to collect higher levels of contributions and improvement [in] its financial position.”
New strategic plan

However, to achieve this, he noted that the NIS Board and management must put relevant measures in place and meaningful steps must be taken to revolutionise the Scheme through the crafting of a 2020-2029 Strategic Plan.

He advised that the plan must coincide with President David Granger’s Decade of Development strategy which would steer the Scheme towards enhanced systems and procedures and the use of information technology. He also advocated for a complete overhaul of the NIS legislation which, he said, in its current form, cannot take NIS into the next 50 years.

“The NIS must no longer be in a begging position, where employers thumb their noses at the Scheme, deducting employees’ contributions and using it as their cash flow. I am tasking the Board and the Legal Department of the NIS to immediately lead the process to reform the legislation, to imbue it with teeth and muscle,” he said.

Minister Jordan explained that such a move would do away with the need to approach the Court for a Garnishee Order and introduce stiff penalties, including imprisonment, to those who deduct and not remit to the NIS.

Another recommendation given in keeping with the Scheme’s last Actuarial Report was the implementation of a Formal Long-Term Investment Policy.
Gone are the days of reckless investment

“I urge the Board to start this discussion immediately, because the viability and sustainability of NIS is grounded in large measure on this policy. Gone must the days when NIS’s money was recklessly invested in schemes such as CLICO,” the minister said.
“I am happy to report that nearly a billion dollars has been paid to the Scheme, thereby helping it to improve its solvency. If I am sad, it would be because this money could have been used to advance human and social development in other areas.”

He stated that NIS’ finances must no longer be invested in projects such as the Berbice Bridge, where returns are not forthcoming or as exploited as a “slush fund to be lent to political friends and institutions” as was practised by the former Administration.
He also urged the NIS to find innovative ways to sustain itself; tread carefully when venturing into unknown areas; think outside of the box; collaborate with the Central Housing & Planning Authority (CH&PA) and other credible housing developers to invest in housing; make investments that yield higher returns than what is currently being received and adopt enhanced measures to collect the existing contributions and reduce the number of delinquent employers who do so at the risk of their employees.

At the same time, the Finance Minister urged the scheme to take the elderly into consideration, who may not be computer-literate or may not have access to the internet, to keep up with the particulars of their contribution status. He told the audience that while Guyana’s Natural Resource Fund (NRF) does not cater for pension and other social security expenditures, the government could include a social security component in the future to better serve the needs of Guyanese.