THE government is expected to undertake a comprehensive assessment of the National Insurance Scheme (NIS) this year and examine recommendations made in previous actuarial reports to determine a way forward for the entity.

This was highlighted by Senior Minister with responsibility for Finance, Dr. Ashni Singh, when he made several declarations during his speech on the 2021 National Budget, on Friday last, at the Arthur Chung Conference Centre.

“Successive actuarial studies conducted over the years on the NIS have highlighted the need for significant reforms to address issues related to the viability of the scheme. Many of these reforms require serious review and consideration,” Dr. Singh remarked during his address before the National Assembly.
Dr. Singh said that the government is cognisant of the numerous complaints being made by contributors about the scheme’s quality of service, and missing documentation and records. As such, the scheme has been tasked with setting up a special project to address these operational issues.

“The scheme must ensure that these concerns are addressed with the utmost urgency,” Dr. Singh said.
Established in 1969, the NIS is a social security organisation which provides social insurance coverage on a compulsory basis, to all persons between the ages of 16 and 60 years who are engaged in insurable employment. Coverage is also extended on a voluntary basis to persons who cease such employment before reaching the age of 60 years, until the attainment thereof.

Deductions for the scheme are made from employees’ salaries by their employers and then remitted to the scheme. However, a common occurrence over the years is employers making deductions from employees without paying the money over to the scheme.

“Even as we undertake analytical reviews, we must ensure that the NIS addresses the operational inefficiencies that currently obtain. Contributors’ records must be updated promptly and accurately. A priority of this administration is to ensure that the NIS brings contributors’ records up to date and that they receive their benefits in a timely manner,” Dr. Singh said.

The scheme is managed by a government-appointed board. A new board was appointed last December, headed by Chairman, Ramesh Persaud. The current General Manager is Holly Greaves.

The scheme has been operating with a deficit for some years now, with the shortfall being shouldered by the National Insurance Fund, which has just over $31.731 billion. In 2019, the NIS ended the year with a deficit of $1.5 billion, with an income of $24.864 billion, but expenditure of $26.367 billion.

The bulk of the scheme’s revenue comes from contributions made by registrants, however, just 22.7 per cent of scheme’s registrants, and 26.6 per cent of the employers registered with the Scheme are active.
In 2019, the NIS registered 9,502 new registrants, but added 2,856 new old age pension claimants, paying a total of 38,175 old age pensions at an average of $31,642 per claimant.