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TUC: National Insurance now on “the back burner”

Representatives of the local Trade Union Movement engage in a meeting with Minister for Health in 2018 to discuss the NHI

The Grenada Trade Union Council (GTUC) has accused the Keith Mitchell-led government in St. George’s of not being serious with the National Health Insurance (NHI) which it was pushing as a major issue in the build up to the 2018 general election.

THE NEW TODAY has obtained a report on the performance of the National Insurance Scheme (NIS) that was put together by its two representatives serving on the Board of Directors – Bert Patterson of the Technical & Allied Workers Union (TAWU) and school teacher Kenny James.

The report said that the NHI has been effectively put on “the back burner” by the Mitchell-led government which has been running the affairs of Grenada for most of the past 30 years.

In their report submitted to the 15th Biennial Convention of the TUC held under the theme, Solidarity and Education to Protect Workers’ Rights and Benefits in the Midst of Covid, James and Patterson said: – “During the last two (2) Conventions the National Health Insurance (NHI) which the GOG then treated as a priority and had decided in the initial discussions to fully involve the NIB (National Insurance Board) in its roll out and administration has apparently gone to the back burner.

At some point the UWI and NIS (which) played consultative and administrative roles were replaced by a Private Sector for profit entity out of Miami.

ACTUARIAL REVIEW
The 12th Actuarial Report and Recommendations as at December 31, 2018 were adopted by the NIB. Sad to say the major recommendations of the 8th, 9th, 10th and 11th Actuarial Reviews have not been fully implemented.

These have been: –

(1). The increasing of the retirement age to 65 possibly over an 11 year period (Noted that in our 2017 Report the period was 16 years).

(2). The increasing of the contribution rate possibly by more than 2.9% in the first instance. (Noted that in 2020 it was increased by 2% that is .9% less than required).

Further delays in implementing the main and other necessary recommendations severely shorten the viable life span of the Fund.

The Report indicated that if the necessary changes are not made, the Fund will exhaust its reserves by 2034 and if pension benefits are indexed to inflation that date will be 2032.

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It is also pointed that if the NIB has to be funded for the next 60 years the contribution rate will have to be 25%.

It is pointed that for the first time in early 2017, Benefit Payments were more than Contribution Income which effectively means it has become necessary for the Investment Income to be used to meet NIB commitments to Beneficiaries.

This has been predicted but had the necessary adjustments been made as recommended by the Actuarial Reviews, this significant happening should have been delayed for several years and likewise extending the life of the Fund’s viability.

It is glaring that this and past governments do not fully grasp the severity of the delay in taking the necessary actions. It is understood that there will be resistance to major changes that will not serve well for political popularity and it is assumed that when the actuality of NIS not being able to meet its commitments will be after they have left the seat of Government, but this is too important for mere political considerations to be the deciding factor.

EXTRA REGIONAL INVESTMENT
One of the recommendations of the Actuary that was acted upon since 2016 has been the investment in extra-regional securities markets that could have been done by the Board without the need for GOG approval.

The NIS had after extensive research and vetting starting in 2016 engaged internationally recognised fund managers Kovack Securities, Oppenheimer Fund and USB Investments and have placed significant funds to be invested on the international markets with separate custodians of the funds.

These international investments even in the volatile markets of the last five (5) years is the factor that is most responsible for the growth seen by the NIB Fund and the NIB has been conservatively increasing its investments in this area.

This action will reduce cash and cash equivalents held which now earn .25% or less interest and spread risks outside of the local and regional economic space.