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NIS would have collapsed by 2013 without bold initiatives – GTUC
…dividends from CLICO investment sustained the scheme
GTUC General Secretary Norris Witter
General Secretary of the Guyana Trades Union Congress (GTUC), Norris Witter, said, yesterday, that even before the CLICO (Guyana) debacle began to unfold, there was evidence that suggested that the National Insurance Scheme (NIS) would collapse by 2013 unless bold initiatives were undertaken.
According to Witter, a few months ago, the GTUC and other stakeholders were involved in discussions with the NIS Board in respect to reform of the entity.
During those discussions, he added, based on information presented to them such as financial documents and actuarial reports, it was very evident that unless some very bold initiatives were taken the scheme would have collapsed by 2013.
“That decision did not take into account, and rightly so, this situation currently faced by the scheme in respect to its large investment in CLICO.”
Witter noted that what has been keeping the scheme going over the past years is the dividends from this very large investment by NIS in CLICO.
Those dividends were in the vicinity of $1.23B, he stated.
“Now with the collapse of CLICO (Guyana) those dividends will no longer be forthcoming. In addition to that, the $6B plus invested in CLICO is now basically in jeopardy.”
According to him, the GTUC in collaboration with other stakeholders will have to make sure, if the $6B is not repaid by CLICO, that the government makes right those sums to the NIS.
“It is workers’ money and we are saying that the workers should not be made to suffer because of the recklessness on the part of anyone, be it CLICO (Guyana), be it the Commissioner of Insurance, or the Government of Guyana.”
Witter also said that the union already has information that the NIS has not been performing to the satisfaction of the contributors.
He pointed out that the 2007 annual report clearly suggests that the scheme’s expenditure exceeded its income by more than $500M.
“What we know for a fact also is that the ratio between contributors and the beneficiaries… that ratio has been reducing substantially. I think the ratio about eight years ago was about four contributors to every beneficiary and it’s just about a ratio of two contributors to one beneficiary and it keeps reducing.”
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