NIS in trouble…Immediate reforms needed as income dwindles – Board
Immediate reforms are needed at the state-owned National Insurance Scheme (NIS), its Board of Directors yesterday warned.
“The year 2012 has issued in a period of importance for the scheme and importantly for its stakeholders. The challenge of maintaining its financial viability has become even more pressing and it is evident that immediate solutions are necessary,” NIS said in a statement from Board Chairman, Dr. Roger Luncheon, on the state entity’s anniversary.
It was established in September 1969 to maintain a system of social security through which enough income is secured to take the place of earnings when such are interrupted by sickness or accident. The scheme was to also provide for retirement through age and sudden death of a breadwinner.
However, expenditures in recent years have risen and there have been fears of a collapse.
Many pensioners depend on NIS’ pension.
“Expenditure has risen in the face of payments for rising benefits claims, particularly those related to long-term old age pension. The situation has been compounded by rising commodity prices for goods and services needed by the scheme for its operations.”
According to the Board Chairman, on the other hand, revenue growth has stalled, lagging behind expenditure growth.
“Contribution income growth has not occurred adequately and investment income growth by the scheme has not been forthcoming. The continuation of this current dispensation is clearly not an option. Aggressive and immediate reforms are required to enhance growth in revenue and to control expenditure.”
This has to be accomplished in the face of adverse demographic changes.
Already, a mandatory, periodical review has been completed for the period 2007-2011.
“Soon, its findings and recommendations would be presented to stakeholders. Those findings and recommendations should represent the main focus of attention of all stakeholders who would be expected to contribute constructively to the resolution of the challenges facing the scheme,” the Board said.
“The NIS Board and Management greet this anniversary with pride and quiet determination.
In five decades of operation since its creation in 1969, the scheme has earned a reputation as a quality National Institution of Guyana.”
The entity’s role in providing short-term, long-term (pension) and industrial benefits to the working class in Guyana has been discharged consistently and predictably since the formation.
NIS made it clear that its contributions to the economy are significant.
“The scheme in discharging its mandate has impacted on practically every sector of the economy and focuses on contributing to national development. The adoption of new management tools including modern technology has expedited the delivery of NIS services to local communities in all parts of Guyana. Challenges have been encounters and are being overcome in this decade as the scheme has delivered its mandate.”
On the critical issue of backlogs, NIS said it focusing on reducing it.
“Highly focused attention on reducing the backlog, expediting claims processing and answering queries has been prioritized in the annual work programme of the scheme.”
NIS has billions of dollars passing through its’ accounts through investments in the Berbice Bridge. It also owns property, including the former CLICO building on Camp Street, where the Guyana Revenue Authority plans to relocate several departments later this year.