Dear Editor,
Was Dr Luncheon awake as the Chairman of the National Insurance Scheme (NIS) when the Board made the decision to invest 20% of the Scheme’s assets (the workers money) in CLICO? If yes, he is not fit to hold the position of Chairman. Is GAWU in agreement with this decision?
Who authorized the government guarantee of $4.75 billion NIS investment in CLICO? In light of the fact that most of the Trinidad funds of $3 billion will be used to first fund other creditors like the private pension funds and certain others who have invested in CLICO, the NIS can only expect the crumbs.
The potential increase in the national debt when the government guarantee is called could be as much as $2 billion, which can only be funded ultimately from higher taxes. This is a double whammy on the workers since as a result of NIS being technically insolvent, NIS contributions might have to be raised, and on top of that these same workers will be called upon to pay more taxes to fund the unsound NIS investment in CLICO authorized under the PPP/C government. The workers (on average 1/3 of the population) who pay into the NIS all their lives can expect decreases in their real pension benefits in the future as inflation eats away at what little they have. There is minimal hope for significant real increases in the near future to meet their social security needs.
So for Dr Luncheon to say that the five years annual revenue growth has not been keeping up with expenditure growth, and that situation is related primarily to demographic changes, is to be very economical with the truth; it is classic political speak. What Dr Luncheon is not telling the people is all the facts we have outlined above, including that on the NIS books there is an investment asset item called Accounts Receivables from CLICO of some $4.75 billion which was supposed to generate some $360 million in new income every year, but to date has brought in very little, if anything, since CLICO is not in a position to pay. If this NIS investment had not been made in CLICO, the NIS would have had enough funds in the bank to fund the deficit until 2018.
Thus the existing NIS contributors like the sugar workers, bauxite workers and public servants will be called upon to bear the burden to keep NIS alive when most of the blood and sweat of NIS has been frittered away as a result of the poor investment decisions under the PPP/C government. It is time GAWU and sugar workers distance themselves politically from this failed regime, since they have done little for the workers lately.
Finally we call on the NIS to conduct the 8th actuarial review immediately since the 7th which was done 6 years ago, is dated and cannot provide the quality of information needed to engage in effective consultation on this crisis. Again here is another case of the government not getting the “arithmetic” (a word borrowed from President Clinton) right.
Yours faithfully,
Asquith Rose
Harish S Singh
