Grenada’s National Insurance Scheme (NIS) is to undergo significant legislative changes to prevent it from going bankrupt in the next decade, Prime Minister Dickon Mitchell announced on Tuesday.
“This government intends to act, and we intend to act quickly …this National Insurance Scheme is staring bankruptcy in its face if we do not take the necessary measures to ensure that the fund is put on a sustainable path,” Prime Minister Mitchell told the end of Cabinet news conference.
He told reporters that some of the major stakeholders, such as trade unions and the Public Service Commission (PSC), are willing to do what is necessary to facilitate the changes to save the scheme, which was established in April 1983.
“And the fact that the major players have indicated their willingness to support the changes and had called upon the prior administration to act is the testimony of the fact that we are partly in this situation because of past failure to act, and we cannot continue like that,” he said without indicating how soon these will be presented to the Parliament for approval.
“However, before the legislative changes are placed before the Parliament, there will be a public education campaign explaining the justification for the changes. Among the changes will be an increase in the pension age, an increase in contribution, and repealing or amending clauses as it pertains to survivors’ benefits,” Mitchell said.
The NIS is equivalent to what is referred to in other countries as social security, and Phillip Telesford, who is the minister responsible for NIS, said the NIS Board had made numerous submissions to the previous administration for certain interventions and actions by way of legislative changes.
“What we have noticed is that a lot of these recommendations are still in their embryonic stage of condemnations, Cabinet has approved, but no further steps taken in order to ensure that the proper changes have been made. So, we have reviewed all of that and have come to the conclusion that immediate intervention and careful intervention has to be administered in order to save the NIS,” he said.
Telesford said the increase in pension age is causing the biggest worry for the authorities, noting that “from the seventh actuary review back in 2004 to present, every single time, the actuary requested that the requirement age be amended.
According to the 2020 NIS annual report, which was tabled in the Houses of Parliament last year, the year 2020 was one in which the National Insurance Board (NIB) demonstrated its ability to overcome challenges while remaining focused on the continuous improvement and sustainability of the Fund.
The labor employment legislation does not have an age of retirement. The retirement age starts at 50 for some public service professions, while in the private sector, it is based on the NIS Act.