NASSAU, BAHAMAS- Minister of State in the Office of the Prime Minister Myles LaRoda has revealed that government is looking to implement a rate increase for the National Insurance Board (NIB) every two years for a period of time in order to stabilise the fund and will also introduce legislation to give NIB more power to go after delinquent businesses.
During his budget debate contribution in Parliament On Tuesday LaRoda who had responsibility for National Insurance noted that NIB is paying out significantly more in benefits than it is receiving in contributions. In 2022, benefit payments amounted to $353 million, while contributions totalled $300 million.
The increase in benefit payments is attributed to a rise in the number of pensioners benefiting from the fund, which has increased by over 35 percent in the last decade. Additionally, the average benefit for recipients has been increasing each year, resulting in higher payouts. Currently, there are approximately four contributors for each pensioner.
Minister LaRoda noted that NIB has only had one rate increase in its 50-year history, which occurred in 2010. He stated that the proposed rate increase, expected to take effect next year, would raise the employer portion from 5.9 percent to 6.65 percent and the employee portion from 3.9 percent to 4.65 percent, with the rate increase set at 1.5 percent.
LaRoda emphasized the importance of the rate increase as a means to secure the pension system for the future. He also mentioned that legislation would be introduced in Parliament later in the year to facilitate these changes. The proposed legislation aims to enhance compliance and enforcement and grant NIB greater authority to pursue delinquent businesses.
Prime Minister Philip Davis yesterday announced that government will implement a National Insurance Board (NIB) rate increase at the start of the next fiscal year, ending months of speculation regarding government’s plans to address the sustainability of the fund.
Earlier this month Prime Minister Davis while acknowledging the need for adjustments, stated that no NIB rate increase will occur during the new fiscal year beginning July 1. Instead, the rate increase will be introduced next year, on the first of July 2024.
According to Davis, the government’s goal is not merely to ensure the longevity of the NIB but to create a system that truly serves its purpose: to support Bahamians when they need it most.
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