Part One of this captioned article ends on the seeking for necessary clarifications of ‘sobriety and integrity’ to address the confusions and concerns which originate from the statement on 24 January 2023 by the Government Minister with responsibility for the National Insurance Scheme (NIS), during a Press Conference facilitated by Dickon Mitchell, Prime Minister and Minister for Finance.
Philip Telesford proclaims that beginning 01 February 2023, there will be gradual increases in the contribution rate to the NIS, which is extremely critical to “enable us (‘Government/NIS’) to properly fund an Unemployment Benefit Scheme to benefit the population”.
The Government then gazetted this announcement on 30 January 2023, by amending the regulations (Statutory Rules and Orders – S. R. & O.) for the contribution rate of employees’ earnings, from eleven percent (11%) to twelve percent (12%); thus, S.R.O. No. 8 of 2023 and S.R.O. No. 9 of 2023.
As the article reminds and (re)focuses on the leading contentions and reasons which were submitted over the years for increasing the pension-contributions rate and the pension-retirement age as relates to NIS, the expressions by Telesford deviate from what the Grenadian-people have been expecting to tolerate.
Now, the people need to ‘recalibrate and decide’. Some of the pertinent questions which arise from the ‘different reason or new goalpost’ for the increases in the contribution rate to NIS as presented by Honourable Telesford and which deserve the deliberation and preoccupation of the people, are elaborated herein Part Two.
What are the justifications for the addition of an “unemployment benefit”, or any other type of benefit (and/or any type of benefit scheme) which is to be operationalised within the NIS, in the light of the already managerial viewpoint and financial condition regarding the NIS?
Is this “unemployment benefit scheme” a ‘separate special’ scheme (like the anticipated ‘features and operations’ for the National Health Insurance); and what are the details on the regulatory execution of such scheme by NIS?
What mathematical model, risk analysis and regulatory reform have been applied for successfully meeting the overall demands on NIS’s funds, when considering the scary financial condition painted about NIS, the past experiences of NIS with lost investments, the old areas of contention for the life of NIS, as well as the introduction of any additional ‘new’ benefits to be serviced by NIS?
Has the Government budgeted for and injected a start-up amount to this crisis Unemployment Benefit Scheme; and/or will the Government provide any matching funds?
Indeed, the 2023 Budget Statement on 05 December 2022 informs about the intent of the administration of the National Democratic Congress (NDC) to “implement a permanent unemployment benefit insurance programme” through the National Insurance Board of NIS.
Honourable Dickon Mitchell who is also responsible for National Security, Home Affairs, Public Administration, Information and Disaster Management highlights thus, “This programme (‘or scheme’) will provide cash transfer to workers who are rendered unemployed in the event of a natural disaster, pandemic, or other such shocks”.
Observing that the issues about the Unemployment Benefits and the NIS were conveyed as two different items, amongst others in the Budget, about “Reimagining Social Protection and Safety Nets and Tackling Poverty”, the people need to know more, so as to prepare for facing the particulars and consequences of both items.
The position was also highlighted that to prevent NIS from being “bankrupt in the next 10-12 years”, the Government will implement recommendations of the Actuary as follows:
“(i) Increase the pensionable age on a phased basis from 60 to 65, starting with a move to 61 by January 2024.
(ii) Gradually increase the contribution rate for employers and employees from its current level of 11% to 16% by 2031, starting with an increase in 2023 to 6.5% and 5.5% …. for employers and employees, respectively”.
The last increase to the contribution was done by two percent, virtually in January 2020.
Understandably, the aim for an Unemployment Benefit Scheme will form part of the conversations of Grenada’s new NDC Government and the “top management of the Board” of the NIS.
Apart from the application of the principle of Continuity in Government despite change of political administration, the rationale for focusing on this unemployment benefit scheme is especially based on the pressure which NIS had to undergo by the ruling administration which preceded the 23 June 2022 NDC, for funding the ‘State relief obligation’ to the involuntarily unemployed individuals due to the global COVID-19 health crisis.
However, the experience speaks in part to the much ‘disrespect, deception, manipulation, intimidation and overpowering’ by the Government to the NIS, more than to the ‘inevitability and imperativeness’ to have such a scheme by the NIS.
Here is a pertinent reference from a July 2017 circulated article by Social Activist Ms. Sandra Ferguson on “The National Insurance Scheme and the Public Debt“. That is, “We the people have been aware for the longest while that the National Insurance Scheme had become a sort of piggy bank to successive political administrations.”
The recently concluded Structural Adjustment Programme has sharpened our awareness of how much central government may have been presiding over the pauperisation of the NIS and other state-owned entities. …. Every time, the central government was in a “jam”, NIS “helped out” by “investing” in government paper” – link to website https://wethepeoplegnd.org/economy/public-debt-et-al/sap-and-the-national-insurance-scheme/.
Of pointed interest on the particular issue in question is the headline “PM Mitchell hijacks $10 million from NIS”, appearing in The New Today 17 April 2021 E-paper and referencing the ‘disappointment and disapproval’ of the workers’ representatives on the NIS’s Board about the attitude and action of the Government under the New National Party (NNP).
The news outlet claims that the report to the 15th Biennial Convention of the GTUC (Grenada Trade Unions Council) which was held on 27 March 2021 contains; “ …. the Prime Minister (‘Keith Mitchell’) prior to any consultation brief or contact announced that the NIB (‘NIS’s Board’) will administer an Unemployment Benefit of $10 million …. which the government will reimburse.
However, when the GOG (Government of Grenada) actually made contact with the NIB it indicated the funds will not be reimbursed by the GOG and would have to be funded by the NIB. As this Benefit was completely unfunded, the GOG has asked the NIB to do all that is necessary to implement a permanent funded Unemployment Benefit. That work has been done and the recommendations have been given to the Cabinet for their decision.”
The avenues and requirements for the NIS, had to do essentially with consultations, and considerations and commendations by an actuary. In fact, the disposition and efforts for realising the Unemployment Benefit Scheme would be in line with its promotion via NIS’s Seventh Actuary Report in November 2004.
This was furthermore considered by the Eighth Actuary Report in June 2008, following the widespread devastation caused by Hurricane Ivan on 07 September 2004 and with the Government having to use the NIS to assist in paying unemployment benefits to affected individuals.
More precisely, the 2020 Annual Report of NIS includes the Minister’s Message (Hon. Nickolas T.C. Steele) about “An Unemployment Assistance Benefit was introduced to provide relief as a short-term measure to those persons who were unemployed as a result of COVID-19. The Unemployment Assistance Benefit Programme, being the second of its kind within the last sixteen (16) years implemented by the National Insurance Scheme, has made it clear to the Government the importance of providing protection to the people of Grenada, Carriacou and Petite Martinique in a more consistent manner.
“In this regard, Government, through the National Insurance Board (NIB), has sought the assistance of an Actuary to provide a recommendation for the introduction of Unemployment Benefit as a permanent offering under the National Insurance Act. As such, the Canadian Actuarial Consulting Firm of Morneau Shepell, was engaged to review the Board’s proposal to provide a temporary relief programme to contributors. The Firm provided the appropriate review and recommendations that allowed for the provision of the much-needed support at a critical time.”
Shouldn’t it be considered ‘unbecoming, disingenuous and offensive’ for the NDC administration to launch the Unemployment Benefit Scheme in the manner by which this has been done? This manner is definitely a betrayal of the trust of the people, which was gained through the party’s 2022 Elections manifesto.
The NDC’s “Transforming Grenada” promise towards “Governance and Institutional Rebuilding”, speaks about “effective, responsive, efficient, honest, transparent and accountable Government and that it is committed to uphold, practise and demonstrate those ‘virtues’ in the conduct of public affairs.
“The affairs of a country should not be top secret, but should be open, available knowledge that informs its citizens about the management of the country. To us, our public resources are for the benefit of our people, and as an administration, the NDC values all the components of good governance. We will therefore build a public administration that adopts the culture of these principles”.
With this acknowledgement, the population need to know about the findings and recommendations of the Canadian actuarial firm which have been presented to the Cabinet on the issue of the Unemployment Benefit Scheme.
Moreover, why is it taking so long to have the 2021 Annual Report of the NIS and the Actuarial report(s) subsequent to the Eleventh Actuarial Valuation laid in the House of Representatives and for public scrutiny, before making the ‘drastic and awkward’ decision on the issue? Cabinet rules!
Minister Telesford also uttered at the 24 January Press Conference, “ So that is going to happen. So we are (‘the Government’) making a number of adjustments and as the time goes on, a full rollout of the PR (‘public relation’) is expected to come from the NIS as to what they are doing and Government pledges its continuous support to the Board and to the management of the NIS for continued prosperity of the institution“.
On the first Media Brief on 13 September 2022 of the NDC Government about the NIS, the circulated article “Why The Display By Grenada’s New Administration About NIS Pensions?“ commented thus; ‘It should be reasonable to anticipate that the assurance by the Prime Minister to have “the necessary public education and consultation that is require to sensitize the public about what needs to be done” …. will take place before the end of the year 2022.
To be of any merit though, the sensitisation process to be undertaken before taking the legislative changes to Parliament must be meaningful, thorough and genuine, and be guided by parameters, indicators and rationalities, including pertinent references such as to NIS’s annual reports, triennial actuaries, and the International Monetary Fund (IMF).
In fact, studies and discussions about the past experiences and planned execution of NIS cannot and should not be separated from the many apprehensions about the approaches to “fully implement the National Health Insurance Scheme” ….’. At this stage, people’s inputs are futile!
The Grenadian-people should not lose sight of the intent of the NDC Government also to “go live with the NHI (‘National Health Insurance’) by the beginning of 2025 …. move speedily towards implementation”, according to the Budget Statement.
The Eighth Actuarial Review of the National Insurance Fund as of 31 December 2006, first considered Government’s discussion of health financing, either administered by the NIS or another entity, in wishing to have choice alternatives to the current approach to providing health care in Grenada.
And so, the reality of more pressure on the NIS by the new NDC Government, also means more pressure on ‘poor people’ for the rescue and upkeep of NIS.