— after taking over entity with an operating surplus of $968M, says Jagdeo
— contends scheme’s investment in Berbice Bridge was best investment

VICE-PRESIDENT, Dr Bharrat Jagdeo, on Friday, dismissed claims made by the Opposition APNU+AFC that bad investments of National Insurance Scheme (NIS) funds under the previous PPP/C Administration have gotten the entity to its current state.

Dr Jagdeo was recently reported in sections of the media as saying that the NIS is bankrupt. Speaking to reporters at a press conference on Friday, Jagdeo stated that he was asked at a recent outreach by a citizen about the possibility of increasing benefits from the NIS.

In response, he noted that the NIS is practically bankrupt but government will ensure contributors, past and present continue to receive their benefits.

“So, I can’t commit at an outreach to an increase in benefits but what we do, we make sure that people don’t… some they wake up like in other pension funds across the world and find that they can’t receive their monthly benefits or their medical benefits, that will not happen but I can’t commit to an increase in benefits,” said the Vice-President.
As such, he said it is important to be honest with the people and let them know that the fund is not in good shape and the government will intervene.
He also pointed out that under the APNU+AFC Administration the fund was in a deficit, even though there were issues with the benefits prior but not in the long-term.
It was then that Jagdeo went into details about the NIS accounts.
“We have here the accounts for the National Insurance Scheme. In 2015, it had an operating surplus of $968 million, in 2016, $161 million that is an operating surplus, so it still had money. In 2017, $175 million in deficit, in 2018, $1.6 billion in deficit, in 2019, $1 billion in deficit, in 2020, $1.7 billion in deficit,” the Vice-President told reporters.
He reiterated that NIS moved from a big operating surplus under the PPP/C Administration to a large operating deficit under the Coalition Government.
Meanwhile, he noted that the opposition in a statement brought up the issue of the NIS investing some $2.5 billion in common shares in the Berbice River Bridge.
This statement, the Vice-President pointed out is inaccurate, pointing out that NIS invested $300 million in bond one, $760 million in bond two, $500 million in the subordinate debt, $950 million in preference shares and only $80 million in common shares.
“So on the bonds, the $300 million was paid back and they received $276 million in interest so on that investment of $300 million they received back their investment of $300 million and $276 million in interest so they got $576 million there. On the $760 million, they received $995 million in interest, so they received more in interest than the principal investment so when you put the two combined that’s close to $1.8 billion, they got back,” he explained.
He further noted that on the subordinate debt, some $65 million has been redeemed even as $517 million in interest was received; for the preference shares, $268 million have been received while there have been no returns on the $80 million invested in common shares.
“They (NIS) invested about $2.5 billion in total how much money did they receive back. They received two billion dollars in interest and payment for their preference shares and about $1.3 billion in principle repayment so far they have received $3.3 billion from a $2.5 billion investment.”
The investment by NIS in the bridge is the best investment by the insurance company, he said and contended that the view being pushed by the Coalition that the NIS’s investment into the bridge caused the current problem with the scheme is a fallacy.