The Guyana Public Service Union (GPSU) and the umbrella body Guyana Trades Union Congress (GTUC) say they will not accept any of the proposals made by the actuary for the reformation of the failing National Insurance Scheme (NIS) and blamed government for its current state.
In interviews with Stabroek News, both Senior Official of the GPSU Dennis English and General Secretary of the GTUC Lincoln Lewis, said there was no way they could accept any proposal put forward for the NIS in the actuarial report.
The deadline is approaching for the action on reforms proposed in the report, which has warned that the NIS is near crisis stage.
Among its recommendations is several steps for immediate implementation, including raising the contribution rate no later than this month; hiking the wage ceiling to $200,000 per month and a phased raising of the pension age from 60 to 65.
“The union is not and will not support any of the changes and recommendations they have put forward. What we say downright no to is the increasing of payments and increasing the pension age from 60 to 65. They [the NIS] need to radically sort themselves out,” English, however, said. He spoke on behalf his union because of the absence of President Patrick Yarde.
“We don’t see any of these changes justified… if the NIS is indeed in a crisis, it would have been a crisis contributed to not by our workers but by themselves through their own delinquency. So, if they caused a crisis, why should we who have been paying and honouring our obligations be penalised? Now, they are rushing to say implement what? No. No. Don’t rush anything. Take your time and sort yourself out,” he added.
English opined that given the fact that contributing to the NIS is mandatory, there should be some compulsion on NIS’ part to guarantee contributors their due in benefits. He was sure that if it were not mandatory, many would have opted to not contribute and have independent insurance policies, given the shabby treatment they receive when applying for benefits. “People don’t have a choice. They must contribute or face the consequences, so they [the NIS] should also be mandated to live up to their part…. Some people are so frustrated with the NIS when they go there—they hear they can’t find certain records, you can’t access—and if they had a choice they would not be a part,” he added.
Meanwhile, the GTUC recommends that NIS’ record keeping should be strengthened. “Possibly look at cross referencing with other organisations that also collect similar demographic data, for example, GRA. NIS is still plagued with problems of name spelling, matching of birth date, and identifying workers through their numbers. It may help to look at a ‘Universal System of Numbering’ that binds the worker/citizen from birth to death on public record,” Lewis said, as he cited the United States Social Security Number system that ties legal residents to all public/business transactions.
Among other recommendations given were the de-politicisation of the NIS Board—which has been chaired by Dr Roger Luncheon for the last two decades—in favour of persons of “competence” and bonafide stakeholders; revisiting the investment policies and portfolios with a view of safeguarding and insuring workers’ money; and examining the impact on the Caricom Free Movement of Skills that allows for the transfer of NIS contributions.
In addition, Lewis said that NIS needs the tools for proper policing, compliance in the field and at the court. “Empower the compliance officers and court with the necessary laws and actions that will be a meaningful deterrent to cause employers and [the] self-employed to realise it is better to comply than not,” he said.
Lewis believes that the laws should be strengthened to prevent persons and especially the self-employed, from taking advantage of the system. “There need to be laws in place to prosecute and stop person from engaging in falsification,” he said as he made reference to a senior male private sector official who paid additional sums to qualify for a benefit that could be accessed in short term, only to submit a claim for a sickness only known in women.
Lewis even accused government of robbing the cash-strapped NIS by employing contract workers, who are told that they must pay their own contributions.
In addition to violating the law and worker’s right, Lewis said this situation leaves the worker to pay at the rate of a self-employed person (11.5%) and absolves the employer from the legal responsibility of paying (7.8 %), which complements the rate paid by non-contract workers (5.2%). As a result, he is contending that the NIS loses the difference of 2.5% through the employer’s action.
Lewis added that that the proposal for the pensionable age to be increased to 65 might sound good but should be examined holistically within the context of country’s life expectancy, which is averaged at 68 years, retirement age in the public service, which is 55, and the general retirement age of 60.
“We are talking here about giving a person only three years to enjoy a pension they have contributed to throughout their work life, [and] having some persons already waiting from 55 to 60 to be extended to 65. If this is not phased in a 10 years gap, and denying person a compensatory pension, in terms of the prevailing economic circumstance at the time is being paid,” he said.
“…So, if you stopped working ten years ago at a certain income, when you are entitled to receive pension that income is no longer consistent with prevailing incomes within the market and in real wage you earn less,” he further noted.
In its New Year’s Message last Friday, the GTUC said the NIS is now at “a critical juncture” and deserves “national mobilisation and strident action” to resolve its problems.
“The attempts by the political administration to treat flippantly with the reports highlighting the Scheme’s health must be rejected for it is no secret the NIS, though initially abhorred by the PPP when in opposition, on assuming office the PPP made this Scheme a cash cow to engage in acts they knew were tenuous and staff the NIS Board with persons who know not, nor care about the Scheme and its viability to the workers,” it charged.
The Private Sector Commission (PSC) has also rejected the reform proposals, urging the scheme to get its house in order before imposing further burdens on employees and employers. It declared that it will not support the recommendations to hike the contribution rate and increase the pensionable age unless the Scheme is more efficiently run.
