Implementation of NIS actuarial review proposals not mandatory

Implementation of NIS actuarial review proposals not mandatory – Dr. Luncheon

Oct 04, 2013 News

Implementing recommendations of actuarial reviews done for the National Insurance Scheme (NIS) is not mandatory by law, and consequently, government did not heed proposals from the Seventh and Eight Actuarial Reviews, which it found unfavourable.
Cabinet Secretary Dr. Roger Luncheon made this assertion yesterday at his weekly post-Cabinet press briefing at the Office of the President.

Cabinet Secretary, Dr. Roger Luncheon

The question of implementing the recommendations comes on the heels of the NIS’s hierarchy emphasizing the challenges facing the entity, at the scheme’s 44th Anniversary celebrations this year,
The Eighth Actuarial Review, done on the fund as of December 31, 2011, highlighted that the scheme was nearing crisis stage and funds will be exhausted in less than 10 years, unless contribution rates and benefits reforms are done immediately.
The review recommended an increase of the contribution rate from 13 percent to 15 percent no later than January 2013; increase in the monthly wage to $200,000; and the pensionable age should also be raised from 60 to 65 years on a phased basis and there should be a freeze on pension increase for two years until the contribution rate is increased and finances improve.
According to Dr. Luncheon, many of the recommendations of that review were rejected by stakeholders at meetings held in the three counties. For instance, public servants do not want the pensionable age to change. In addition, Government did not find the recommendations favourable, so they were not implemented. He clarified that the actuarial review was not done in futility since it is mandatory that every five years this exercise must be conducted.
Luncheon said that at the NIS’s Anniversary celebration, General Manager Doreen Nelson concentrated on the scheme’s nationwide provision of services, wide ranging benefits and the financing of the operations, particularly benefits expenditure. He said the scheme’s major focus for its 45th year and beyond was identified as data and debt management.
“Records for the period 1989 to 1998, Cabinet was advised, remain the major outstanding source of stakeholders’ frustration with the scheme and interventions including in-house projects and major outsourcing activities are being implemented to conclude by 2014 the incorporation of the 1989 to 1998 information into the scheme’s permanent records,” he said.
Luncheon said that as far as debt management is concerned, Cabinet was advised that defaulting employers and self-employed persons continue to owe the scheme hundreds of millions of dollars. The management and the board pledged more systematic and aggressive efforts would be made to collect those arrears.