The National Insurance Scheme (NIS), which is predicting a deficit of $414 million for 2018, has served a demand notice to the Guyana Sugar Corporation (GuySuCo) for an outstanding debt of $250 million.
General Manager of the NIS, Holly Greaves told the Parliamentary Sectoral Committee on Social Services yesterday that while the sugar company has paid the $1.5 billion it owed in 2015 the interest remains outstanding and the scheme plans to take the Corporation to court to secure these funds.
In 2015 the scheme announced that the NIS had agreed to honour contributors’ claims after GuySuCo submitted a payment schedule. Stabroek News had reported at that time that GuySuCo had not been required to pay the interest that is supposed to be surcharged and the company had pledged that worker benefits would not be in danger owing to the delinquency in payment.
Meanwhile, Greaves told Stabroek News that while the restructuring of the Sugar Corporation had the potential to seriously affect the level of contributions received as thousands of workers were removed from the workforce, this has not materialized.
“A large number have re-registered as self-employed or have moved on to different companies. Around 60% of them are still contributing to the scheme,” Greaves indicated. Concerns had been raised that the layoff of some 4,000 sugar workers would see a “significant” decrease in the annual income of the National Insurance Scheme (NIS), for which GuySuCo has been the largest single contributor.
According to GuySuCo’s 2015 annual report, which was laid in the National Assembly in December, the company, which at that time employed about 17,000 persons, had contributed $1.28 billion to the scheme. A similar contribution of $1.288 billion had been made in 2014.
With 4,000 workers or roughly 23.5% of the GuySuCo workforce having been made redundant, the exact financial impact on the scheme was unknown but Public Relations Officer Dianne Baxter has told Stabroek News that it was expected to be significant.
“GuySuCo is and has always been NIS’ largest contributor… so a significant decrease in its contribution will have a significant impact on the Scheme’s annual income,” Baxter explained.
The Scheme has faced difficult financial circumstances, with expenses exceeding income over the last three years. The Scheme’s finance controller Jacqueline Scotland said that the NIS fund currently stands at $31.9 billion. A $414 million deficit is predicted for the year 2018. The Scheme has budgeted for revenue collections of $23.2 billion and expenditure of $23.6 billion.
She stressed that an aging population is currently placing pressure on the Scheme, noting that while the request to increase rates of reimbursement for various payouts, the aging Scheme makes such costs prohibitive.
Already the Scheme is projecting that it will have to pay increasing benefits of $2 to $3 million every year over the next few years.