BRIDGETOWN, Barbados– Prime Minister Mia Mottley says Barbados is nowhere near a crisis where the National Insurance Scheme (NIS) is concerned, even as she acknowledged that urgent action was needed to avoid reaching that stage.
On Wednesday, at a press conference about the future of the National Insurance Fund, Mottley said early intervention was critical.
“We are not in crisis, but we want to avoid a problem 15 years from now. That is therefore going to mean that those of us who are responsible for making decisions can do so at the earliest possible opportunity.
“There are countries in the Caribbean five or six years away from the moment we are talking about. We don’t want that to happen to us,” the Prime Minister said.
She further pointed to the United States, where the Government has to contribute annually to keep its social security system afloat.
“The numbers for that are about 0.7 percent of GDP. If I were to equate that to Barbados, it would mean that we would be putting in, at the moment, about BDS$70 to $75 million (US$35 to $37.5 million) a year to keep our National Insurance afloat. We are not doing that, nor are we there, and we don’t want ever to be there, hence these early discussions,” Mottley said.
The Prime Minister assured the public that the NIS was in a position to satisfy all claims made on it legitimately today.
Deputy Chairman of the National Insurance Board Rawdon Adams also promised Barbadians that while Government is acting now to avoid the depletion of the National Insurance Fund, they do not have to worry that they will lose any of their benefits “overnight.”
He said it would take another 12 to 19 years before the Fund was depleted.
“The fund at BDS$3.9 billion (US$1.85 billion) is nearly five times what the current expenditures on benefits are. It’s not a fund that’s going to fall over. Nobody will lose their benefits overnight because of what we’re talking about here. We’re not kicking the can down the road. We have time to fix this. We are approaching it methodically inclusive of everybody we speak to; we want them to participate in it,” Adams explained.
He noted that an aging population, a declining workforce, and slow economic growth rates were some of the significant factors contributing to the depletion of the Fund.
“The fundamental issue here is structural. We can make all the operational improvements we wish. Still, unless we change something to increase those who are contributing [to the NIS] and look at how we can ensure that benefits don’t run ahead of our capacity to pay them, we’re not going to fix this. [The depletion time for the Fund is] 12 to 19 years from now; it is important when we look at this to realize this is not a prediction. This is a timely reminder that if we do nothing, we’re going to be in trouble,” the Deputy Chairman underscored.
Minister of Labour, Social Security, and Third Sector Colin Jordan said the Government would soon be soliciting written submissions from the public.
He added that town hall meetings would be convened to gain as much input as possible from the public.
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