NIS has been in the news for all the wrong reasons
For someone like Ms Doreen Nelson, General Manager of the National Insurance Scheme, with reportedly more than 25 years of service, to be accused of being disrespectful to the Board of which she is deputy Chairperson, there has to be a plausible reason for the resignation in apparent anger. Time only will reveal the truth.
Meanwhile, Editor, this story came at a time when the problem-plagued NIS, considered by many as a formal socioeconomic safety net for Guyana’s poor, has been in the news of late for all the wrong reasons, starting with the 8th Actuarial Review released last November that said the NIS will run out of funds in nine years.
But the Actuarial Review noted that the NIS’ dilemma may have stemmed from a failure to make key changes since 2007 – which would then place the blame squarely on the NIS board of directors chaired by Dr Roger Luncheon.
I recall reading, on the occasion of the NIS’ 40thanniversary, observed on September 29, 2009, then PNC Leader, Mr Robert Corbin, reportedly greeted the observance with a call for greater efficiency and a clear statement from the government on the Scheme’s US$30 ($6B) investment in the now defunct Clico. But that wasn’t the only huge withdrawal from the NIS.
The Jagdeo-led PPP regime also loaned US$4M ($800M) of NIS money to help build the $1.65B Caricom Secretariat headquarters. Another $250M was reportedly loaned to Laparkan to facilitate, among other things, the company’s hire-purchase programme. Then the regime went against sound advice and took US$10M ($2B) or US$30M ($6B) (depending on the source) and invested it in the Berbice River Bridge project. Anyone doing the maths here will see that anywhere between $8B and $13B were taken from the NIS for projects and Guyanese still have no idea where the returns are on these investments.
As an interesting aside, Mr Corbin also noted in his 2009 salutation that when the NIS was launched, the then opposition PPP not only criticized the Scheme as a PNC political instrument intended to penalize sugar workers, but also vigorously organized demonstrations by sugar workers against NIS. Ironically, he observed, these (sugar) workers became the largest single category of beneficiaries of the Scheme.
He continued by explaining that for forty years, the NIS has been highly successful and has provided major assistance and a multiplicity of benefits for Guyanese of all races and classes. These benefits include sickness benefits, employment injury benefits, maternity benefits and allowances, invalidity grants, invalidity pensions, old age pensions, survivors’ pensions, disablement pensions, overseas medical care, survivors’ grants, funeral grants and industrial death pensions.
Now, with that list of areas of assistance still active, there is no way that the NIS, reportedly experiencing its first deficit of $371M in 2011and likely to incur an even larger deficit for 2012, can responsibly meet its basic obligations, or even the much hoped for unemployment insurance programme, unless government takes or borrows money from somewhere (China?).
In fact, the 8th Actuarial Review on the NIS says, “Between 2007 and 2011 the Guyana economy performed well, but NIS finances deteriorated more than expected as the greater than expected increase in the number of old age pensioners and reduction in investment yields have not been fully offset by increased contributions.” It further suggested that “Urgent attention is required if the NIS is to meet its future obligations without burdening employers and workers.”
Unfortunately, the NIS Board is recommending increasing contribution amounts and extending the pension age from 60 to 65 to make up for its poor policy oversight that cost the institution billions, but the parliamentary opposition has already indicated it will not support any such legislation.
At this critical juncture, it really does not help that disconcerted Guyanese who are worrying over the state of the institution facing insolvency in nine years are now countenancing uncertainty over the management of the NIS with an Assistant General Manager being recently fired for failing to communicate, two senior officials being recently reprimanded for allegedly divulging NIS information at an NIS public hearing to discuss raising rates and the pension age, and the General Manager publicly resigning over an NIS Board matter and then rescinding her resignation in 24 hours.
If there is anyone who should resign from the NIS it should be Dr Roger Luncheon, because the NIS went from solvent to near insolvent on his watch. But then again we really can’t expect the President to ask him to step down, because the President himself sat on the GuySuCo board for years while the corporation haemorrhaged billions of dollars, including the US$180M Skeldon white elephant, and he was subsequently rewarded with the presidency.
You have to really wonder who is minding the store, really?