The New Today


Why the display by Grenada’s new administration about NIS pensions?

What message and emotions are meant to be generated by Grenada’s 23rd June 2022 administration of the National Democratic Congress (NDC) during its Post-Cabinet Press Briefing on 13 September 2022, which was conducted primarily by the Minister responsible for Finance and Information, Prime Minister Dickon Mitchell, and the Minister with responsibility for Social and Community Development, Philip Telesford, concerning the functional existence of the National Insurance Scheme (NIS)?

Was the ‘anxiety and alert’ displayed about the ‘adequacy and sustainability’ of NIS to meet pension-payments, ‘new and extraordinary’? Was the pertinent information presented on the bleak financial position of NIS and the way forward, ‘complete and accurate’?   Is the new NDC-administration conversant and well-advised on the historical context and the corrective measures for the intricacies involved in the management of NIS, particularly the National Insurance Fund?

The initial gesticulations by this ‘transformational powers-that-be’ on NIS’s predicament evokes the substance and relevance of the previously internet-circulated article “Grenadians Should Know and Defend NIS Pension Fund” as a sovereign interest, right and duty.

Understandably, there will be the consciousness and quest for political mileage by any ambitious incoming administration; however, it is hoped that there was no motive of political malice in the display by the NDC administration about NIS-pensions, because such posture tends to communicate wrong signals and fuel political tribalism.

In fact, the Administration might just be exposing its weakness and subtleness and thus bringing embarrassment on itself. Counted as the ‘responsible and ready’ alternative party for State Power, what vigorous advocacy was evidenced by NDC during its long stay in opposition, on the critical national issue of the NIS?

Had this outstanding significant issue escaped NDC when in making the commitment during the elections campaigning to “Pay pension, gratuity, and other retiring benefits in keeping with the Constitution”, with respect to qualified public officers?

Did it escape the ‘new NDC’ that whilst stressing about the “past failure to act” by the previous administration of the New National Party (NNP) on the pertinent recommendations of actuaries since 2004, despite having had the support of the major players for the necessary changes, the NDC’s 2008–2013 Administration must have also been privy to at least the seventh and eighth Reports to the Government on the actuarial review of the National Insurance Fund?

Had this present NDC’s configuration sought guidance and included areas of action and advancement on those NIS Reports, from the then Tillman Thomas’ NDC-administration?

Comparing the pronouncements and tone by the ministers at the Press Briefing, with the contents and findings of NIS’s 2020 Annual Report, what really was on display? Was the display about the intelligence, competence and integrity of the “new Board appointed” for the NIS, or was it about that of the related Director of NIS?

Furthermore, was the display about highlighting an acute case of the “implementation deficit” during the NNP-administration, with now an impressive transformational push of this NDC administration? Should contributors to the NIS Fund seek redress for any illegal withdrawal of the extra one percent which the Government and other employers or companies affected from wages as of 2020?

“The year 2020 was one in which the National Insurance Board (NIB) demonstrated its ability to overcome challenges, while remaining focused on the continuous improvement and sustainability of the Fund which is at the core of what we do. …. For the first time in its 37-year history, the NIB engaged in parametric changes aimed at addressing the financial pressures on the Scheme in keeping with the recommendations of multiple Actuarial Reviews.

“In January of 2020, the contribution rate was increased from 9% to 11%. This was the first of the two recommendations made by the Actuary in the 11th Actuarial Review. Additionally, work commenced in earnest to legislate the increase in the pensionable age in accordance with the following schedule (presently the age is 60 years to be increased to 61 in 2023 with other changes until 2031 and beyond to 65’) While these are necessary ingredients for the sustainability of the Fund, they are not sufficient. ….. ”.

How must such information be interpreted? Isn’t there the setting to build on or advance what has been established, and having the space to perform differently as may be warranted, and thereby appreciating and demonstrating ‘continuous governance’? Was the display by the new Administration about adjusting the said Schedule?

It should be reasonable to anticipate that the assurance by the Prime Minister to have “the necessary public education and consultation that is required to sensitise the public about what needs to be done” concerning that the NIS is “staring bankruptcy in its face”, 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).

It should also be of great interest to ascertain the ‘basis and extent’ of the submissions by the trade unions and the Public Service Commission to the Government on the various reports and recommendations.

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”, thus the public sessions must also be seen as ‘expeditious and expedient’ to inform the process going onward.

The NIS episode may just be a pivotal point for the NDC-government’s programme to transform Grenada by providing the “balanced and integrated approach to sustainable development”, aligned with “Vision 2035” as outlined in the National Sustainable Development Plan (NSDP).

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Furthermore to the National Health Insurance Scheme, there are directly-related issues which impact on the liquidity and survival of the NIS; most prominent and lingering is the issue of the amounts of wages received, or Minimum Wage legislated.

It should also be mindful though that legislative changes by itself will not give the magic antidote for the NIS, without the proper mechanism to enforce particularly section 13 of the 1983 NIS Act (CAP. 205) on “Appointment and Powers of Inspectors” for compliance purposes and without the proper attitude of the Government towards the National Insurance Fund.

The NDC Administration needs to explain what is its envisaged ‘form and scope’ of the Pension Reform which “will also be a key part of the Government’s plan to ensure a fiscally sound pension and social security system for public workers”, as proclaimed in the 2022 Throne Speech.

Does this take into consideration the recurring remarks in the various court judgements regarding constitutional pensions entitlement of public officers, including the 29 March 2022 ruling of Justice Raulston L.A. Glasgow? That is, there is the outstanding need for addressing “Regulations for treating public officers, etc., as insured persons” (section 46) and “Modification or repeal of public service pension scheme” (section 47) of the NIS Act?

It would regrettably be ‘remiss and hypocritical’ of the NDC administration, if the elusive realisation about the ‘premise and purpose’ of the 1983 Pensions (Disqualification) Act/CAP. 230A, does not form part of the required legislative changes for the NIS; unless there are compelling justifications on the contrary.

It should be ‘revealing and interesting’ to grasp that a foremost factor for the victimisation practices and employment policies, including on appraisal and regularisation of public officers, lies in terms of the concerns of both the Government and NIS about meeting retirement obligations?

Both CAP. 205 and CAP. 230A are Acts by the 1979 People’s Revolutionary Government; the latter was designed to ease the economic strain on the State but without putting public officers at a loss.

Notwithstanding when lobbying for Prime Ministership of Grenada, Dickon Mitchell posed as ‘would not be giving great attention and priority to the reports of institutions such as the IMF in the governance of the country’, on the 18 January 2022 “To The Point” programme of the Grenada Broadcasting Network, it should be deemed ‘appropriate, wise and advantageous’ for the Government and the new NIS Board of Directors, to also review any pertinent arrangements of the IMF with the Keith Mitchell’s NNP-administration about Pensions Reform.

The past circulated article “Grenada’s Pension Reform Is Under The IMF”, makes reference of an April 2017 Press Release of the Government Information Service about “IMF to assist with Pension Reform in Grenada” and reference of the IMF’s Sixth and Final SAP Report; SAP denotes the 2014 Home-grown IMF-sponsored Structural Adjustment Programme.

The IMF then advises, “…. reform of the public sector pension system should be undertaken in a manner consistent with any planned reforms of the national insurance scheme. On the domestic front, risks are posed by fiscal contingencies on the horizon related to various contractual issues and uncertainty about the costs of reform of the pension system and national health insurance scheme”.

Is there anything of ‘validity and worth’ about those references, especially in terms of present realities in Moving Grenada Forward?

It should indeed be disquieting about the display by the NDC-administration about the NIS, with its focus on the Seventh Actuarial Review submitted in 2004; especially since the immediate ‘plights and pains’ of retirees were not given any serious expressions.

For example, no comments were made about the recommendation for increases in pension payments. That is, “In 2004, increase pensions-in-payment by a graded scale ranging from 12 percent for those whose pension was awarded in 1998 or before to 2 percent for those awarded in 2003. Thereafter, pension increases should occur annually in line with average inflation over the previous three calendar years, with the rules that govern the timing and the amount of each adjustment placed in Regulations.”

Similarly, the Maternity and Funeral grants and minimum pension nominal amounts should be increased by around 12 percent in 2004, and then adjusted automatically each year thereafter”. The nation needs explanations and updates on this aspect?

Moreover, what is the position of the Proposed National Strategic Action of the 2020-2035 NSDP to “Extend maternity leave to 6 months to be consistent with international guidelines and amend NIS Act/revise NIS policy to facilitate the same. Establish an official national policy on paternity leave”.

The young people entering the working world will be most affected by any changes about the NIS, whether positively or negatively in the distant future, as the long-drawn-out struggle of public officers for retiring benefits should have taught.

The young people must therefore empower themselves to exercise keen and active participation in the process to ensure safe ‘satisfactory pensions’ for their generation and the next, from the ‘mandatory contributed’ NIS; despite expansion of different pensions plans in the private sector.

With the participation there comes the role to question and authenticate the information and decision presented by the powers-that-be, such as that Grenada is behind in the Region with legislative changes to the Scheme.

What then is the reason for the changes; is it about contribution deficits or international pressures? Whatever the case, recommendations always need further analyses in terms of socio-economic engineering and legal consequences. For present employees, care must be taken about any retroactive clause with the new pensionable age, on contractual employment principles.

J.K. Roberts