For 2011, when it recorded a deficit of $371 million, the National Insurance Scheme (NIS) has also reported 653 new registered employers and 12,600 new registered employed persons in its system.
According to the Scheme’s annual report, which was recently tabled in the National Assembly, although its income of $11.856 billion represented an increase of 5.3 percent over 2010, it was outstripped by its total income expenditure of $12.227 billion. Total benefits paid amounted to $10.730 billion, 14 percent more than what was paid in 2010.
Contributions to the Scheme amounted to $10.8 billion, while investment income was $990.9 million and other income $50 million.
The report said that at the end of 2011, the National Insurance Fund stood at $30.410 billion.
NIS has been diagnosed as being near a crisis stage, after it recorded its first ever deficit in its 42-year-old history in 2011. A deficit was also projected for last year and the most recent actuarial report had proposed urgent reforms, including raising the contribution rate by 2 per cent no later than January this year as well as a phased increase of the pension age from 60 to 65.
During the presentation of this year’s proposed budget, Finance Minister Dr Ashni Singh announced that the contribution rate for both employed and self-employed contributors to the teetering NIS will be increased by 1 percentage point with effect from June 1, 2013. This measure is expected to generate additional revenue of approximately $890 million per year for the Scheme.
In the annual report, General Manager Doreen Nelson said during the year under review the insurable earnings ceiling was adjusted, in accordance with the increase in the public service minimum wage. “Hence the ceiling was increased to $132,829 per month from March 1, 2011. The minimum insurable earnings for self-employed persons contributing to the scheme was increased from $39,500 per month to $41,475 per month from March 1, 2011,” she said.
Nelson said that the minimum rate payable for old age and invalidity pensions was increased from $15,813 to $16,604 effective from January 1, 2011.
According to the report, 653 employers registered with the scheme during 2011 and of this amount, 619 or approximately 95 percent were small scale employers, employing no more than 10 persons. The report said that 30 or approximately 5 percent employed between 11 and 50 persons while three employed between 51 and 100 persons and one employing more than 100 persons.
“An analysis by industry revealed that the services sector accounted for 260 or approximately 40 percent of the new employers, 85 or approximately 13 percent entered the commerce sector and 91 or approximately 14 percent were absorbed into the construction sector,” the report said.
It said that the manufacturing sector accounted for 56 or approximately 9 percent of the new registrants, the agriculture and forestry sector accounted for 36 or approximately 5 percent while mining and quarrying accounted for 22 or approximately 3 percent of the new registrants.
“The remaining 103 or approximately 16 percent were absorbed in the supply of electricity, gas and steam, water and sanitary services and transport and communications sectors,” the report said.
The report also said that a total of 12,600 employed persons were registered during 2011 and of this total 6,458 or approximately 51 percent were males and 6,142 or approximately 49 percent were females.
The report said that 569 self-employed persons registered with the Scheme in the year under review and of this, 372 or approximately 65 percent were males and 197 or approximately 35 percent females.
According to the report, the average age of new pensioners was 61 years old and their average monthly rate of pension was $25,944. The report said that an examination of the contribution status showed that new pensioners qualified for a pension with an average of 1,135 contributions.
During 2011, the NIS awarded 2,616 pensions, an approximately 14 percent increase over 2010, when 2,286 pensions were awarded.
