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NIS Chairman says…Revenue collection measures need to improve “a hundred times more”
To reach an acceptable level with respect to revenue collection, which has been a challenge for the National Insurance Scheme (NIS), current measures will have to improve “a hundred times more”, according to Board Chairman, Dr. Roger Luncheon.
“That’s a pledge I made to the Opposition and I have no difficulties. I think all of the Directors and Management see the obligation to move our contribution or revenue in more positive grounds to stop having those deficits that were so common in 2011.”
He is adamant that the NIS is not a sinking ship and will not need financial assistance from Central Government for its survival in the near future. He also claims the entity started this year with a surplus and is hoping that it is sustained
“The difference between those of us who know… I have been the Chairman of NIS now for a lifetime, and I am not really of the opinion that is being bandied around that it is on its knees and couple mornings from now there is going to be a big bailout from Central Government. I certainly don’t think so.”
These assertions were made in a recent interview with this publication in relation to the current status of the NIS in light of troubling revelations in its Eighth Actuarial Review released late last year.
The review, an independent analysis of the fund as at December 31, 2011, suggested that the NIS is nearing crisis stage and will be exhausted in less than 10 years, unless contribution rate adjustments and benefit reforms are done immediately.
Dr. Luncheon’s claim of a surplus at the beginning of 2013 came just weeks after the scheme’s General Manager Terry Thomas at a forum at the University of Guyana’s Berbice Campus had stressed that the NIS is operating at a deficit – it is paying out more benefits than contributions received on a monthly basis.
Thomas had stated that the Actuarial Review was all about correcting the imbalance.
Chairman of NIS Board, Dr. Roger Luncheon
It was pointed out in the review that this could be corrected “by increasing contribution rates; by having much better and fuller compliance by employers and self-employed persons; by stalling or delaying the pension payments—that is—increasing the pensionable qualifying age and it can also be corrected by reducing the pension of those who come into the scheme now”.
According to Dr. Luncheon, compliance of citizens to make their contributions remains a major problem. He added that the NIS’s revenue and expenditure are not significantly mismatched.
“It is mismatched where expenditure is concerned, particularly benefits expenditure. We spend close to $1B per month in benefits expenditure. We are also about a $1B for overall revenue,” he said.
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