The National Insurance Scheme (NIS) recorded an income over expenditure of $628 million in 2009, down from the $1.4 billion it recorded in the previous year, while the auditors have expressed concern that recommendations made to ensure the future viability of the Scheme are yet to be fully implemented.
The 2009 Annual Report for the NIS was laid in the National Assembly last Thursday and the Scheme recorded a total income of $10.28 billion for 2009, down 1.9 percent from the $10.4 billion recorded the previous year.
According to the report, the amount paid as benefits during 2009 was $8.35 billion, 7 percent more than the $7.83 billion paid in 2008. Total expenditure for 2009 was $9.65 billion, while the National Insurance Fund stood at $30.05 billion.
There was a 0.8 percent increase in contributions during 2009. According to the report, a total of $8.9 billion was recorded as income from contributions compared to the $8.8 billion in 2008. Investment income, recorded at $1.3 billion, declined by 16.5 percent, compared to $1.6 billion in 2008. “Other income” declined by 15.5 percent in 2009, being pegged at $28.4 million compared to the $33.6 million the previous year.
A total of 12,481 employed persons were registered during 2009; 6,686 (54%) were males while 5,795 (46%) were females. 233 of the registrants were under 16 years, 12,214 were from 16 to 59, and 35 were 60 years and over.
The number of Employed Persons registered with the Scheme as at 31st December, 2009 totalled 626,632. The active registrants as at 31st December, 2009 were approximately 119,355.
There were 571 self-employed persons registered; 387 (68%) and 184 (32%) females. 201 of the total self-employed registrants fell into the 16-30 age category, 269 were in the 31-45 age category, and 101 were in the 46-60 age category.
The Auditors, TSB LAL and Co, noted that the actuaries had reported several maters of concern, among which was that annual expenditure was projected to exceed the year’s contribution income beginning in 2014. Reserves are expected to be exhausted in 2022. “The actuaries made certain recommendations to ensure the future viability of the Scheme but so far these have not been fully implemented,” the auditors said.
The Actuarial review had pointed out that reserves are projected to continue growing through 2014, reaching $33 billion. At this point, total expenditure will exceed total income for the first time. Unless the contributions rate is increased, assets will have to be sold each year to meet expenditure, it had noted. It projected reserves to be exhausted in 2022.
Several recommendations had been made, including maintaining the defined benefit structure of the NIS but review certain parameters. According to the report, the NIS Board of Directors is in the process of reviewing the actuaries’ recommendations.
The report also referred to the situation with collapsed insurance giant CLICO, in which the Scheme had invested $5.7 billion, but noted that due to the uncertainties regarding CLICO’s future and its ability to honour its debt when due, the amount has been guaranteed by the government.
