The National Insurance Scheme (NIS) will be hosting two days of consultations with the private sector, parliamentary political parties and other stakeholders to discuss the eighth actuarial report, which has warned that the scheme is near a crisis stage.
The Chairman of the NIS Board Dr. Roger Luncheon announced the consultations during a post-Cabinet press conference at Office of the President.
He said that the first stakeholders’ consultation will take place today, with members of the private sector bodies and organized labour and on Friday with consumers, the pensioners’ body and the parliamentary political parties.
Luncheon added that these sessions are being hosted by the NIS board and management and it would “allow stakeholders to consider the actuarial report and discuss the way forward for the NIS.”
The actuarial report, done by consultants Horizonow, noted that in 2011 NIS experienced its first ever deficit in its 42-year history of $371M.
A larger deficit is envisaged this year and the report said that with assets of just over two times its annual expenditure the “entire Fund will be exhausted in less than 10 years if (the) contribution rate increases and benefit reforms are not made immediately.
The report has urged the raising of the contribution rate from 13% to 15% no later than January next year, hiking the wage ceiling to $200,000 per month and a phased raising of the pension age from 60 to 65 to keep the scheme afloat.
It was also highlighted that no remedial action had been taken since 2008, when the 7th actuarial review had proposed a number of reforms. In addition, a NIS reform committee appointed by the government had made reform recommendations in 2007 but there was no meaningful change.
More recently, NIS’s finances have further been clouded by the impairing of its $5.8B investment in Clico (Guyana). Since 1992, Luncheon has chaired the NIS board.
In June this year, Derek Osborne, Chief Actuary of Horizonow Consultants Ltd visited Guyana to put together data and met representatives of the NIS, the government, the opposition and other stakeholders. The report covers the period 2007 to 2011.
