Overall, the National Insurance Scheme (NIS) is in good financial standing and able to meet claims, despite one of its funds being “totally exhausted”.
Acting Director of the NIS, Jennifer Hunte, gave this assurance during this evening’s press conference which focused on labour.
She said the NIS had “adequate reserves” to meet claims, pointing out that five of the six funds it managed were “strong”. She also provided an overview of the status of the investment portfolio of each fund for 2020.
“The largest fund is the National Insurance Fund and [its] investment portfolio at the end of January is $3.8 billion. At that same time, the Unemployment Fund has been totally exhausted. The Severance Fund, $74.1 million, the Catastrophe Fund, $41 million, Retraining Account $1.6 million and the Sugar Workers Provident Fund, just $15,842,” Mrs. Hunte disclosed.
As it relates to the Unemployment Fund, which was hardest hit due to job losses resulting from the impact of the COVID-19 pandemic on businesses, Mrs. Hunte said measures have been put in place to ensure the payment of unemployment benefits.
“In terms of what the Unemployment Fund faced last year…we paid $155.5 million. To put that into perspective, the previous year, we spent $49.3 million. In 2018, we spent $38.1 million, and in 2017, $32.8 million. So, comparatively you can see the impact of COVID-19 on the fund in 2020.”
“The investment portfolio was totally exhausted and the National Insurance Board agreed to utilise a significant portion of the portfolio of the National Insurance Fund to facilitate the ongoing, uninterrupted payment of unemployment benefits. This specific source was the early redemption of Government bonds to loan the Unemployment Fund. So, that is how we were able to keep paying unemployment benefits during last year, and how we would continue to pay them this year,” Mrs. Hunte explained.
The NIS official further stated that discussions were being had with the Ministry of Finance on the repayment of monies to the National Insurance Fund and recapitalisation of the Unemployment Fund.
Mrs. Hunte also disclosed that the NIS had processed millions of dollars in severance payments last year, as a number of persons were made redundant.
According to her, funds in the amount of $18.3 million were processed and paid to employees whose employers had not paid the requisite contributions.
She continued: “We also paid $3 million as rebates to employers who met their requirement, and then got the 25 per cent rebate from National Insurance. Compare that with 2019, [where] we paid $21.2 million to employees and $6.5 million in rebates, so the Severance Fund still has $74.1 million in it, and that is there in the event that we have to process more rebates and employer payments for those employees whose employers did not meet that commitment.”
The Acting NIS Director also gave the commitment that the staff would continue to work to process all claims in a timely manner.