NASSAU, Bahamas, CMC—Prime Minister Phillip Davis has sought to reassure Bahamians that despite plans to increase the National Insurance Board (NIB) rates by 1.5 percent from July, the increase will be shared by employers and employees.
“Bahamians know the importance of NIB, which offers significant benefits and acted as a critical safety net during Hurricane Dorian and the COVID pandemic.
“NIB offers short-term social security benefits, including sickness, maternity, funeral, and unemployment, long-term benefits, including retirement, invalidity, survivors, old-age pension, and industrial benefits, including medical care, injury, disablement, and death benefits,” Davis said.
He said during the midterm budget debate this week. His administration had outlined meaningful progress in moving the country forward despite its serious and complex challenges.
“We came to the office during a time of crisis. Yet, despite the significant debt we inherited, we knew our policies needed to go beyond rescue, relief, and recovery,” Davis said, adding, “We have worked to strengthen our fiscal position even as we invest in our people and our communities, strengthen our borders, and build more inclusive economic opportunities.
“We turned a stagnant economy with historically high levels of unemployment and record budgetary deficits into record-setting tourism arrivals, 15-year lows in unemployment, healthy GDP (gross domestic product) growth, and an improving fiscal situation.
“We are taking on some of our nation’s most difficult issues—problems that we believe must be confronted, including energy sector reform, new measures to fight crime, and action on dismantling our shantytowns.”
Earlier, Alfred Sears KC, the Minister with Cabinet responsibility for NIB, said raising the total contribution rate by 1.5 percentage points every two years over the next two decades was not set in stone.
In his statement, Prime Minister Davis said that in reforming the NIB, the July 2024 rate increase announced earlier by Sears will be accompanied by comprehensive reforms to improve customer service, reduce fraud and inefficiencies, strengthen financial accountability, transform the digital infrastructure, reduce administrative costs, improve the investment strategy, and ensure that the NIB is there for Bahamians when they need it.
“Rates will increase by 1.5 percent in July, an increase to be shared by employer and employee,” Davis said, adding that “Social Security and insurance funds such as NIB in countries the world over are facing the same challenges we are due to changing demographics, with fewer workers making contributions.”
He said an Actuarial Review of NIB recommended increasing the contribution rate not just this year but every two years for years to come.
“Minister Sears repeated those recommendations today. These continued rate increases would be required in a worst-case scenario. A decision has yet to be made beyond the initial 1.5 percent announced to commence on July 1, 2024,” Prime Minister Davis said.
“As we progress with comprehensive reforms, policy-makers will continuously evaluate the efficiencies gained and consider the best path to delivering sustainability.
“We advised last year that a rate increase would be implemented this July to provide advance notice. We are aware of the burdens of the high cost of living, made worse by a global inflation crisis, and policy decisions will continue to reflect consideration of what is in the best interests of the Bahamian people,” the Prime Minister added.
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