NASSAU, BAHAMAS – Notwithstanding recommendations, Public Service Minister Brensil Rolle said yesterday an increase in NIB contributions is not on the government’s agenda.
Rolle sought to clarify recent comments made by National Insurance Board Chairman Troy Smith, who reportedly said he expected the fund’s ongoing actuarial audit to recommend an increase in contributions.
“I can’t specifically say whether or not the government will head in that direction,” Rolle told Eyewitness News.
“It’s not a matter we’ve discussed in Cabinet to make a determination on it.”
Rolle noted that the point behind the comments was that if NIB does not increase its contributions then it’s going to have to reduce its benefits.
“The government has not made a determination yet on whether or not we are going to go forth with an increase or whether not we are going to find some means to address the concerns that come out of NIB as a result of a reduction the contributions,” he continued.
Several international organizations have warned successive governments to increase the fund in order to ensure its survival.
In a 2016 report, the International Labor Organization (ILO) recommended that NIB raise the pension contribution rate from 6.2 percent to 10 percent.
The IDB’s Bahamas country strategy report for 2018–2022 warned that “public sector liability due to pensions will be unsustainable by 2032, and could trigger a fiscal crisis and large increases in the national debt beyond the already concerning elevated levels.”
But Rolle said despite these numerous warnings, “saying that does not mean it’s going to take place”.
“I’m not in a position yet to present to the government the complete works of the auditors, the actuaries and so until I get to that point, I am cautious in making any firm statement on this matter,” he said.
The public service minister also noted the state of the fund must also be reviewed in the aftermath Hurricane Dorian, which ravaged parts of Grand Bahama and Abaco in early September.
“It has really given us a real concern,” Rolle said.
“You got to first realize that two of your central contribution base has been almost depleted totally – that’s Abaco and Grand Bahama.
“And then on the benefit side you must pay out these benefits. So when I’m collecting, there isn’t any contributions to collect. So yes, that’s a major, major concern. “
Rolle revealed the Abaco contribution has been cut by close to 80 percent.
“Businesses are not functional anymore,” he continued.
“So these same individuals who have lost businesses, we must now find the means to pay the benefits to them as a result of the unemployment assistance or whatever other programs we have at NIB.”
While he could not indicate how much contributions were lost on Grand Bahama, Rolle said: “you are talking about a significant number of independent businesses, the whole of downtown where business was booming in Marsh Harbour and in Grand Bahama no longer exists.”
He said he was not alarmed by the initial projects of the actuarial audit, but needed to fully review before he can present a position to the government.