The Parliamentary Sectoral Committee on Economic Services (PSCES) in its fifth periodic report to the National Assembly has recommended that the National Insurance Scheme (NIS) update its laws where necessary to address current and pressing issues.

Following three meetings with the key NIS players,  one last year and two this year, the committee came up with a number of recommendations which it believes could assist the scheme in providing better service to its contributors.

While not in the ambit of NIS, the committee also recommended that the courts address NIS matters shortly while urging the scheme to strategise on ways and means to broaden its contributors’ base with special attention to the  self-employed category.

“The monitoring and enforcement capacity of NIS should be improved to facilitate greater compliance by contributors,” the PSCES said   in its recent report and it further called for an examination to be conducted on the provision of services from the Public Sector by the scheme.

It also said that NIS needs to establish greater institutionalized engagement with the Ministry of Health to provide services to contributors.

It was suggested too that contributors be encouraged to utilize services owned and managed by the government where these are available in order to ease the burden on NIS paying large sums of monies to the private hospitals and private health practitioners.

Further the committee recommended that in keeping with its regulations NIS should “continue to and ensure that it honours contributions made by employees who provide employment letters, pay slips, etcetera to the NIS, even where their employers have been in default and have not submitted their contributions to the NIS.”

The committee urged that the NIS continues with its awareness programmes on a consistent basis, including worksite visits, which it said will address issues of concern to the general public.

And even though NIS sent annual records of employees to their employers, NIS should consider providing annually an aggregate update of the contributions of  contributors directly to the contributors.

According to figures provided to the committee by NIS there was an increase of 493 registered employers with the scheme between June 2008 and June 2009 from 29,269 to 29,762. On the other hand in June 2008 the active employed population was 116,032   as opposed to 124,204 in June 2009.

When the NIS top brass was asked what percentage of the agricultural sector is in compliance with the scheme, it was pointed out that the sector has members who do not like to be registered.

“Many use the fluctuating fortunes inherent in the industry to avoid compliance,” the report stated.

According to the NIS the remoteness of the sector’s operations and the environment under which it operates present difficulties in accomplishing compliance.

“There is a need for an all-agency collaboration to capture the members of this sector. At the moment, only the civil minded, the conscientious few are on record. Efforts are being made to obtain from the Statistical Bureau the figures for the industrial distribution of employed persons so that the percentage coverage could be ascertained,” NIS said.

NIS also said that an all-agency is also needed to deal with the mining, transport and construction sectors even as it revealed that the expansion of its enforcement and monitoring  units unto areas where such activities are prevalent is the main tool being used to get defaulters  to join the scheme.

As to what is being done to get employers to pay in workers’ contributions on time, NIS said that constant monitoring, warning of litigation and legal proceedings are some of the weapons employed to ensure timely payment by employers. The scheme said that imposing penalties is also effective  but on the other hand  the General Manager has the discretionary power to grant credit to disadvantaged employees once it has been established that there was no collusion between the employer and the employee to defraud the scheme by not remitting contributions on time.

And while legal actions against defaulting employers are generally successful, NIS said it is too protracted.

“The scheme is reliant to a major degree on the workers to provide information relative to suspected non-compliance, apart from its monitoring mechanism. The staff in the inspectorate is restricted however by lack of mobility and a high turnover rate. Miniscule fines and the courts’ inability to swiftly deal with NIS matters and provide bailiffs to execute writs also lend to slow progress in this area,” NIS said.

Meanwhile, as of September last year the NIS fund had $29,865,447,000 while cash in hand was $34,324,000 and cash in bank $307,719,000. Ninety-five percent of the fund was invested at the time.

And the scheme had reported that there are restrictions in the availability of longer term investments which usually yield higher returns and in the scheme’s ability to invest in overseas markets offering more lucrative returns.

“Moreover Cabinet implemented the Prudential Investment Framework with the main objectives of acquiring optimum returns in investments without  undue risks, reducing the burden on contributions to meet the cost of the scheme and  to instill public confidence in the scheme,” NIS said.

Importantly, NIS said, it has been able to reduce its paper usage as a result of computerization and therefore expected to have further reductions with the introduction of the electronic schedule submissions. Information on claims and contributions are instantly available, lending to quick decisions and answers to queries and improved customer service.