The National Insurance Scheme (NIS) is expected to lose $414M this year alone, representing further slippage in earnings, which officials say is due to a combination of factors, including the closure of sugar estates.
This was disclosed by the scheme’s Finance Controller, Jacqueline Scotland, during an appearance yesterday with other senior officers before the bi-partisan Parliamentary Sectoral Committee on Social Services.
In response to questions about the scheme’s viability in face of the closure of the estates from Opposition MP, Vishwa Mahadeo, Scotland disclosed that the Scheme’s current fund stands at $31.9B as of June 30.
The state-owned Guyana Sugar Corporation (GuySuCo) was one of the largest defaulters, owing in excess of $1.5B. However, NIS General Manager, Holly Greaves, shared with the committee that the sugar company had paid off the debt except for $250M in accrued interest on the outstanding amount.
Greaves stated that the Scheme plans to take legal action against GuySuCo to recover the monies. It has served a demand notice.
“We intend to move to the court to get it,” Greaves stated. Minister within the Minister of Health, Dr. Karen Cummings, asked about plans the Scheme has to recover monies owed by businesses that deduct monies, but don’t pay over to the Scheme.
Greaves stated that the scheme has also implemented a debt management section to pursue persons who owe NIS.
Even with debt management, there are fears about continued slippage of contribution as against the payment of benefits. This year, NIS is expected to pay out $23.6B with contributions projected to reach $23.2B.
Then there is the effect of ‘right-sizing’ GuySuCo, which led to the closure of Skeldon, Rose Hall, Wales and East Demerara ‘Enmore’ factories that saw close to 5,000 workers being severed. This represents a further significant loss of contributions for NIS.
Greaves noted that NIS is also facing the continued effects of an aging population with payments to this segment increasing by at least $2M each year.
“For the last three years, we have also recorded deficits, but what we are doing now is to try to get into some for those areas that we have contributors and undertake feasibility studies to see how best we can increase our contributing population,” Greaves noted.
Based on the last actuarial report, it was disclosed that the life of the scheme should come to an end in 2021/22 unless strategic plans for revenue earnings and expansion of the investment portfolio are effectively implemented.
NIS is currently undertaking a new actuarial report, which is expected to provide recommendations to ensure the scheme’s viability beyond 2022.
Among the expected recommendations is an increase in the percentage insurers contribute to the scheme.
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