It was also recommended that the minimum monthly pension of $3,000 be frozen for the next nine years or until pensions equal 80 percent of the minimum wage. To ensure that depletion does not occur over the next 50 years, the rate of contribution is required to increase to 25.5 percent. This increase is expected to push back the date of depletion for NIB’s assets to 2043. The actuarial review recommends an increase inthe contribution rate of employers and workers to the NIS from 13.2 percent to 16.2 percent, starting in July 2019. Given the important social protection the system provides, mechanisms must be put in place to significantly enhanceits long-term viability. It is worth noting that 23 benefits are paid from the NIS, including pensions, disability grants and maternity benefits.
To fund the shortfall, some of the income generated by NIB’s investment fund has been used to pay benefits. Since 2013, the benefits paid from the system exceeded the contributions made. The tenth actuarial review of the NIS, conducted in 2016 indicated that if no changes are made to the way it operates, the assets of the National Insurance Board (NIB) will be depleted by 2036.
#REPORT RECCOMENDS BITING THE BULLET SERIES#
Today, I begin a series titled “Biting the Bullet”, where I intend to highlight some of these issues.The first matter I will deal with is the state of the National Insurance System (NIS). When it comes to bringing rectitude to these failings, the general approach has been to kick the proverbial can down the road. As such, there have been many initiatives announced, several started, but very little follow through. We have known for a long time that we must move to address these issues, but only seem motivated to do so when tough economic times bring them into sharper focus. These challenges are broad based, affecting the economy, government’s finances and social security, to name a few.
As a country seeking to transition to developed-nation status, it is incumbent on us to bring resolution to key issues that continue to impede Trinidad and Tobago’s development.
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