Incoming rate increase to shrink NIB deficit by $27M says exec

NASSAU, BAHAMAS — A National Insurance Board executive revealed yesterday that NIB’s deficit this year would shrink by $27 million due to the forthcoming rate increase set to take effect on July 1.

Dr Tami Francis, Deputy Director responsible for New Providence operations and actuarial services, spoke at a press briefing at the Office of the Prime Minister, stating: “If there were no increase, the deficit would be around $65 million. However, with the upcoming increase on July 1, our deficit will be reduced to about $38 million. That’s a $27 million reduction. You can see that the contribution rate increase is something that is very necessary, and we are on our way toward sustainability for the fund.”

The increases scheduled for July 1, 2024, will raise both employer and employee contributions by 0.75 percentage points each. The employer contribution will climb to 6.65 percent from the existing 5.9 percent, while that for employees will increase from 3.9 percent to 4.65 percent.

The contribution rates for self-employed and voluntarily insured individuals will also rise from the current 8.8 percent and 5 percent, respectively, to 10.3 percent and 6.5 percent. This adjustment forms part of a strategy to ensure the long-term survival of The Bahamas’ national social security system, meeting its benefit obligations to all citizens and legitimate persons who qualify for assistance.

Dr Francis noted that, currently, NIB holds $1.4 billion in reserves. She highlighted that these reserves were pivotal during events such as Hurricane Dorian and the pandemic, enabling NIB to provide significant assistance during 2019 and 2020.