(Video) NIS stakeholders baulk at extending pensionable age to 65

The National Insurance Scheme (NIS) actuary’s recommendation that the pensionable age be increased by five years was yesterday shunned by stakeholders, who are instead demanding that the NIS sticks to its current retirement age and tightens up on defaulters.

“When you see that tape so close and then somebody just decide to move it and you barely get the energy to make it there, is dead you gon dead to meet that other tape…,” one contributor posited at an NIS organized public consultation. “I see that tape already and I don’t want when I ready to touch that tape somebody come and move it because I want collect me thing at 60!”

The consultation with the public comes after the latest actuarial report warned that the scheme is near crisis stage. Done by Actuarial and Financial consultants Horizonow it noted that in 2011 NIS experienced its first ever deficit in its 42-year history of $371 million. A larger deficit is envisaged this year and the report said that with assets of just over two times its annual expenditure the “entire fund will be exhausted in less than 10 years if [the] contribution rate increases and benefit reforms are not made immediately.”

Several steps were recommended for immediate execution including raising the contribution rate from 13% to 15% no later than January next year; hiking the wage ceiling to $200,000 per month and a phased raising of the pension age from 60 to 65.

Chairman of the NIS Board Dr Roger Luncheon had denied that the NIS is in immediate financial trouble and could soon collapse. Luncheon, who is also Head of the Presidential Secretariat, has chaired the NIS Board since 1992, and has faced criticism during his tenure. He agreed that there was much evidence not only from seventh report but also from the NIS reform committee of problems in the scheme. But he said the recommendations were not mandatory and choices could be made on implementation, although he admitted that the latest review suggests “specific recommendations… should have been given greater attention.”

Asking a question at the NIS consultation yesterday

It was that seventh report Earl B John referred to when he asked officials who was to say that these consultations would not be given the same nonchalant response as prior reports and recommendations. He informed that he had been a part of a countrywide consultation back in 2006 and a part of an NIS reform committee set up in 2007. “Nobody looked at it. Not a single paragraph of that report was implemented. I am not convinced we are going to do much better this time around. I don’t this exercise is structured enough,” he said as he held up a copy of the report. John opined that a task force be set up to look into the recommendations taken from the countrywide consultations.

He sympathised with the employees of the NIS, especially the inspectorate. “I don’t think they can stand up to the employers who are powers that be,” he said to thunderous applause from the employees present.

Further, he pointed out that while the actuary’s report highlighted that only 60% of earners contributed to the mandatory scheme, if checks were made that figure would increase. “He concentrated on one side of the picture and numbers don’t tell you about the quality of life. If we had a proper accounting of the potential employer contributor to the organisation then he might find that the gap, the 60% gap, is wider than that; not counting the self employed,” he said.

“Complying is the essential exercise that has to be carried out. You cannot penalise people who have no prospect of earning a living. They are pensioners and that concept is totally unacceptable. The five-year gap is unbearable for some people, particularly in the lower level and they cannot make the contribution between 55 and 60 and if they can’t and don’t meet the criteria contributions [they] lose their pension,” he added.

Accountant Christopher Ram, who helped craft Grenada’s NIS Board’s policies, was most vocal in his overview of the state the scheme. He said it was very unfortunate that persons who are in the investment committee were absent as a major factor to the current state of NIS was the failure of Clico, “having pumped $5.7 billion into Clico, and it is a very unfortunate omission by our actuary that he failed to even mention that particular item.”

Ram also lambasted the actuary’s daring recommendation of the pension age moving from 60 to 65, since, as he stated, in the report that he was not presented with sufficient data on Guyana’s sociological makeup.

“He is saying let us go to increase the pension age to 65. The Bureau of Statistics’ website gives Guyana’s life expectancy as 63. The poor person who has not had the benefit of good health, good diet, good exercise will suffer. Did this actuary take account of the sociological factor? And the real consequences of what he was saying?” he asked rhetorically.

He questioned the report that states that a little less than $18,000 was sufficient to meet the needs of pensioners. “$17,932 provides a very adequate level of protection for the elderly?” Is this gentleman for real?”

Another area of concern for Ram was the apparent refusal of his pro bono services to the organisation. He made reference to how he came to write to the NIS volunteering his services, after he embarrassingly witnessed one of the attorneys of the entity being made to look incompetent at the Vreed-en-Hoop Magistrates’ Court as he was apparently unprepared. After the consultation NIS General Manager Terry Thomas was overheard telling Ram that the organisation will be in touch with him as it relates to the offer.

Other consultations will be held across the country and the recommendations given to the board of directors.