NASSAU, BAHAMAS — National Insurance Board contributions could increase by up to two percent within the next year as the government seeks to address the fund’s long-standing deficit with payouts outpacing contributions for the past six years.
Minister of State in the Office of the Prime Minister Myles LaRoda said yesterday that Cabinet has yet to make a decision on the recommendation to increase NIB contributions, but believes the increase will be implemented.
“We have tough decisions to make and we are prepared to make those decisions,” the minister said.
“We are talking about tens of thousands of NIB individuals who have contributed, some of them for decades. It would be a shame for those who would have paid in not to be able to receive their benefits at their time. And so, we are prepared, willing and able to address this concern.”
Pointing out that the matter is before Cabinet, LaRoda said: “I will temper that by saying we have not voted on that as yet, but a decision is being prepared and I will not be surprised if that happens for the mere fact that we’re in that unsustainable position.”
Asked for the recommended rate increase, the minister said: “Anywhere from 1.5 to two percent annually, bi-annually for a period of time. So, there is not just going to be one. We could expect numerous increases. That has not been decided by Cabinet as yet, but it would be fair that an increase is coming.”
According to LaRoda, NIB has experienced deficits for the past six years.
The last rate increase took effect in 2010, from 8.8 percent to 9.8 percent.
The rate of contributions is 3.9 percent for the employee and 5.9 percent for the employer.
In January 2021, then Minister of National Insurance and Public Service Brensil Rolle said NIB may have to increase contributions as a result of the payouts required because of Hurricane Dorian and the coronavirus pandemic.
He said there was a recommendation in 2015 to increase contributions to maintain the fund.
The pandemic stalled the global economy, particularly the travel and tourism industries for much of 2020 and 2021.
Closures of non-essential businesses and those dependent on tourism, combined with the lockdowns associated with the public state of emergency, saw joblessness balloon to as much as 40 percent in The Bahamas.
Nearly $100 million was paid out in unemployment benefits via NIB.
Another $92 million was paid out through the government-funded unemployment assistance program.
