Photo(l-r): Deputy Chairman of the National Insurance Board, Rawdon Adams; Actuary with the National Insurance Board, Derek Osborne; Prime Minister Mia Amor Mottley; Minister of Labour, Social Security and Third Sector, Colin Jordan.

Government of Barbados Press Briefing (August 10, 2022)

Prime Minister Mia Amor Mottley is convinced that Barbados is nowhere near a crisis situation where the National Insurance Scheme (NIS) is concerned.

She gave this assurance this afternoon at a press briefing at the Lloyd Erskine Sandiford Centre, which examined issues related to the fund and comprehensive efforts under way to reform the NIS.

Ms. Mottley asserted that the consultations being undertaken now were to ensure that those who would eventually reach pensionable age in the future would also benefit.

“We are not in crisis, but we want to avoid a crisis 15 years from now.  That is therefore going to mean that those of us who have the responsibility for taking decisions can do so at the earliest possible opportunity.  There are countries in the Caribbean that are five or six years away from the moment that we are talking about.  We don’t want that to happen to us,” the Prime Minister said.

Pointing out that early, timely intervention was critical, she stressed the consultations were about the country and its people and not about the Government, any party or even the NIS alone, as an institution.

She also emphasized that a strong Barbados required a strong system of solidarity, and reminded all that the NIS represented such a system.  Ms. Mottley recalled that it was the International Labour Organization (ILO) that aided the region’s thrust to put social security systems in place in the 1960s, and reiterated that Barbados was not doing badly.

Prime Minister Mottley noted the United States of America was in a situation where its Government is contributing every single year to keep its social security afloat.  Explaining, she said: “The numbers for that is about 0.7 per cent of GDP.  If I were to equate that to Barbados, it would mean that we would be putting in, at the moment, about $70 to S75 million a year in order 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.”  

She assured the public that the NIS was in a position to satisfy all claims made on it legitimately, today.

Pointing to a diagram on a screen, Ms. Mottley said: “The top two lines show 2007 and 2008, and in 2008, Barbados had 128,204 contributors to the NIS.  One hundred and twenty-eight thousand, two hundred and four, that was perhaps at its height.  It is anticipated in the actuarial reports…that in this year, 2022, that we would have 137,000 people.  Regrettably, look at where we are at the bottom of the screen; we now have, for sure, at the end of last year, 105,585, with a further projected decline to 104,000.  So, we are effectively 33,000 short of where we wanted to be, or we anticipated that we would be.”

While reiterating the mantra ‘many hands make light work’, the Prime Minister noted there was the inclusion of as many groups and individuals as possible to inform the decisions to be made about the Scheme.

Meanwhile, Minister of Labour, Social Security and Third Sector, Colin Jordan, disclosed that Government would soon be soliciting written submissions from the public and he urged the participation of all, noting suggestions could be sent to the newly created email address suggestions@bginis.gov.bb.

He also revealed that town hall meetings would be convened to gain as much input as possible from the public and they could also look out for suggestion boxes at post offices in every parish.  Mr. Jordan added that a suggestion box would be placed at the Frank Walcott Building for staff to make their suggestions.

Plans To Extend The Life Expectancy Of NIS…..

While Government is acting now to avoid the depletion of the National Insurance Fund, Barbadians should not worry that they are going to lose any of their benefits “overnight”.

Deputy Chairman of the National Insurance Board, Rawdon Adams, gave this assurance while speaking at a press briefing about the future of the Fund, this afternoon at the Lloyd Erskine Sandiford Centre, Two Mile Hill, St. Michael. He said it would take another 12 to 19 years before the Fund was depleted and that’s why it was important to act now to save it.

“The fund itself at $3.9 billion is nearly five times what the current expenditures on benefits are. It’s not a fund that’s going to fall over. Nobody is going to 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 that we speak to, we want them to participate in it,” Mr. Adams explained.

He further noted that an ageing population, a declining workforce and slow economic growth rates were some of the major factors contributing to the depletion of the Fund. He added that when the National Insurance Scheme (NIS) was started in 1967, there was a strong, growing working population contributing to the Fund, not that many retirees and a growing economy in contrast to recent times.

“The fundamental issue here is structural. We can make all the operational improvements we wish but unless we change something to increase those who are contributing [to the NIS] and look potentially at how we can make sure 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 realise 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.

Mr. Adams said the National Insurance Scheme acted as a safety net for Barbadians and played an important role in ensuring that people were not “crushed” by the economic standstill which resulted from the COVID-19 pandemic.

Stating that a “strong Barbados required a strong NIS” he pointed out that the process to creating a sustainable Scheme in the future needed to be not only methodical but also thoughtful and inclusive.

“We started to look at who can be part of our working groups and our advisory groups, assisting a technical core of people to come up with proposals that we can put to the Social Partnership and Cabinet, in due course, and our timeline is very, very tight. We’re moving as fast as we can on this and we hope to have the first set of proposals by the end of the month and that will go to the Prime Minister and to Cabinet for discussion. And, if we have to make adjustments, we will make them but we have a chance here to do something. It’s not just a rescue job, it is really to shape the future going forward,” Mr. Adams emphasised.