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National Insurance Scheme projects at least $33B fund by year-end
A section of NIS employees during yesterday’s Anniversary Celebrations
The National Insurance Scheme is celebrating 47 years as Guyana’s sole social security entity. On Thursday, it was announced that the unit projects that its fund will reach just under $34B at the end of this year.
According to acting General Manager, Holly Greaves, for the period January 2016 to last August, income from contributions was $12.5B or 70.6 per cent of the budgeted $17.7B.
She said that the total expenditure for NIS over the same period was approximately $12.6B or 71.6 per cent of the $17.6B budgetary projection.
Greaves said that the projections for the remainder of the year show that income will total approximately $19B while the projections for expenditure will be approximately $18.6B.
She said that the scheme’s growing benefits expenditure has been consistently surpassing contribution income. According to her, these problems are consistent with a maturing scheme since funds are generated in keeping with the growth of benefits.
Greaves said that the other income earner for the scheme is its investment portfolio. Some of these investment initiatives have not been profitable to the scheme and as a result the NIS will be revisiting the arrangements.
She added that based on repayments from the CLICO investment the scheme will receive $85M together with resultant interest every January from 2017 for 20 years.
According to Greaves as of August 2016 $11.4B was expended on benefit payments. It is expected that the figure will increase to $16B by the end of the year.
The pension branch, old age and survivors accounted for approximately 90% of these payments according to her. The entity reported that the scheme currently serves 47,000 pensioners.
Coupled with this there was an increase in funeral benefits from $33,000 to $36,000 and old age pension increased from $21,000 to $25,000.
She said that an assessment of the current and operating environment of the 2016 budgeted period revealed that there are several issues which should not be overlooked by the scheme that could have an impact on its income and operation.
“These include the development of an informal workforce that is not compliant with the National Insurance Scheme regulations; an increase in the practice of employers deeming workers who are under their supervision and control as self-employed persons and the difficulties experienced in accurately establishing a self-employed population.”
She said that these issues together with an ever aging population and the future of the scheme must be addressed in a constructive way.
Compliance
According to Greaves compliance remains the most challenging area of the scheme. She said that the main source of income comes from contributions paid by employers on behalf of their employees.
“Therefore when employers are delinquent the financial operation of the National Insurance Scheme and its contributors are negatively affected.”
As a consequence, the scheme plans to begin optimising its debt recovery strategy with emphasis on cost reduction and time. Also, there is to be an implementation of a monitoring system to minimise employer delinquency.
“In fact, we are putting employers on notice now, that the scheme will be launching several campaigns commencing in this last quarter of 2016 targeting not only delinquent employers but attention will be focused on those inactive and dormant employers.”
The NIS will also place emphasis on its Information Technology capacity whereby it plans to conduct a programme on data cleansing for its 133,000 contributors.
Further, contributors are being encouraged to utilise the online service to make payments whilst beneficiaries are being urged to uplift their benefits through the bank to ease the stress for waiting in long lines.
At the Anniversary Ceremony several of the scheme’s long standing employees were awarded and a number of students received continuous bursary awards.
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