NASSAU, BAHAMAS — Myles Laroda, the State Minister in the Office of the Prime Minister with responsibility for the National Insurance Board, says judge the Davis administration in five years on whether it helps save the NIB fund, not after less than a year in office.
His comment came as he reiterated that the government will not raise contribution rates at this time even amid serious warnings about the future of the fund.
This administration has been in power less than a year. We are just putting out the information that other administrations did not. The problem was always there. We just decided that the public should know the reality. A decision will be made one way or the other. And so, I think five years will be what we should be judged on — MYLES LARODA
The topic of the fund’s sustainability resurfaced this week after a local daily reported on the International Labour Organization’s latest actuarial report on NIB.
The report, which is dated January 2022, says NIB’s contribution rate must be raised by two percent next month and continue to increase every two years until 2036 to be sustainable.
Laroda said the report is just a recommendation.
“If you look down it’s basically saying for the fund to remain solvent we’re going to have to do different things,” he told reporters before a cabinet meeting yesterday.
“You’re going to have to increase contributions. You’re going to have to cut benefits and you [going to] have to increase the retirement age.
All of those, that’s their recommendation. The government could choose what or any part of it that it will implement or what parts that it will not.”
Laroda said the warnings are not new.
“If you read the 10th actuarial report or the ninth or even the eighth it was saying the same thing,” he said.
“It’s just that the date for completion has been expedited a little bit faster.
The National Insurance Board, the executives, the board of directors, are a group of skilled, talented people and we’re going to have to to find ways in which we’re going to ensure that the fund is saved.
My job is just to put in the public domain what was really out there for a long time, and that is that the fund is under extreme pressure from the fact that we are paying out much more than we are taking in.”
“The reality is years ago we had about 13 almost 14 people that was paying towards the benefits of one person.
That number has reduced to I think less than half of that and I think by 2040 there should be about 3.9 persons to one pensioner.
“We are paying out much more money than we are taking in and that is the reality.
“People are living longer, they’re receiving more benefits.
The ceiling has been raised from $400 in income per week to over $700 and I think there’s only been one increase. And so we are where we are.”
Asked if he and his colleagues are concerned that inaction to save the fund could be a part of the legacy of the Davis administration, Laroda dismissed the notion.
“This administration has been in power less than a year,” he said. “We are just putting out the information that other administrations did not.
“The problem was always there. We just decided that the public should know the reality.
“A decision will be made one way or the other. And so, I think five years will be what we should be judged on.”
