The National Insurance Board (NIB) is moving forward with its scheduled contributions increase despite the dire economic situation in the country, its top executive revealed yesterday.
The last time there was an increase in contributions was in 2018.
NIB Director Dr. Nicola Virgill-Rolle noted that while the board is planning the increase, the exact amount hasn’t been decided as yet.
“We’re preparing for that. As I mentioned it’s in our law, it’s automatic and so we are preparing for that increase,” she said during a virtual Bahamas Chamber of Commerce and Employers Confederation and NIB business information meeting yesterday.
“And so our actuaries will begin to calculate what that will be. It’s based on a percentage of the inflation, the price index. In 2018 it was a 1.2 percent increase and we’ll have to see where inflation is to look at where we’re going to be. It’s an average inflation over a number of years.”
Though well-positioned at $1.7 billion, NIB’s benefits have been outstripping contributions since at least 2016, leading international organizations to recommend the board increase in contributions in order to stave off the collapse of the fund due to the huge financial obligations from pension liabilities.
“That’s just a product of the fact that we have an aging population, we’re having less and less children, so less and less contributors now in our fund and more and more people to take care of. We have been a sicker population as well, so our medical claims have risen,” Virgill-Rolle said.
NIB’s primary focus since March has been distributing unemployment benefits and assistance to workers laid off and without a means to earn money because of the COVID-19 pandemic.
While on average NIB would process about 7,000 claims on a particularly “bad year”, the board has been inundated with in excess of 30,000 claims.
Despite the catastrophic drain on the fund, however, Virgill-Rolle said it remains stable.
“We have a lot of liquid assets because we know from time to time they will be needed,” she said.
“So, on a regular basis our investment department manages its liquidity in terms of just making sure that we know when investments come due, so that we have our regular monthly flow and so when we have an extraordinary flow like this, we just go to our lowest yielding assets and we use the funding from that to pay for these challenges. So, we have a good set of assets to choose from with that.”
The post NIB preparing to increase contributions amount appeared first on The Nassau Guardian.
source https://thenassauguardian.com/2020/05/29/nib-preparing-to-increase-contributions-amount/
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