Restructuring the National Insurance Scheme

Mar 19, 2021 Letters

DEAR EDITOR,

Kaieteur News – The restructuring of an organization according to Google is to re-organize that company, with the view to achieving greater efficiency and profit or simply put, adapt to a changing world. This is exactly what I would like us to focus our attention on today, that is, the restructuring of The National Insurance Scheme (NIS).
The NIS in Guyana is a corporation that has been operating as a welfare organization that is strictly based on welfare principles and laws. When an organization is run along those lines, it means that pretty soon its financial standing will become a problem. Except, that institution can receive funding from multi-sources – which in the Guyana situation it is not – its viability would soon be in jeopardy.
Guyana is already in that bankruptcy zone with much of its inflows being siphoned off into large payouts, this is something that the insurance scheme would not be able to sustain on a long-term basis, greater still, it does not augur well for the institution. There are two inhibiting factors facing the institution: (a) People are living longer, hence they would be benefitting longer from the scheme than their contribution years would have afforded them; and (b) The vagaries of cash inflows with situations such as COVID-19 or unscrupulous employers who do not send in workers’ contributions. These factors place great strain on the cash inflows to NIS.
Now, there are several options available to the authorities to which they can explore, first of these is to raise the age of retirement from 55 to 60 years. In so doing, there will be a surety of many more years of contributions as well as a build-up of a robust cash base. The simple Math of that is let’s say 100 persons would be retiring at the end of this year, it would mean a curtailment of 500 years of contributions. I am talking about 100 x 5 = 500 cumulative years of contributions.
Cash inflows should also be encouraged from the self-employed sector of the economy. An aggressive programme should be embarked upon to get those members of the self-employed to come onboard and into the contributing network. Workshops and other such outreaches ought to be held to educate those contributors as to the benefits to be accrued from enlisting into the NIS Scheme.
Finally, the NIS should be restructured to bring it into the modern age where the institution becomes a robust savings bank. There must be the exploration of sound economic investment programmes to cater for additional income. We are here talking about prudent fiscal investments in areas of national development, in this way we will be moving into the modern era of development.
What I have highlighted above will make the NIS into a strong and healthy financial institution all geared towards the financial stability of the country on a whole. All it takes is the political willpower of the executive to do it. Guyana must move forward and the time for that upward mobility is now.

Respectfully Submitted
Neil Adams

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