Dear Editor,
I hereby ask the citizens, including the President of Guyana, for support, to stop the National Insurance Scheme from charging high interest and compound interest on contributions due, and to provide a breakdown of interest placed on personal accounts when so requested. Under Section 44 (1) All sums due to the Fund by way of contributions, unless regulations otherwise provide shall bear interest at the rate which is one per cent greater than the rate charged by commercial banks on overdrafts or such other rate and as from such date as may be prescribed and shall be recoverable as debts due to the Fund, and without prejudice to any other remedy, may be recovered on behalf of the Fund summarily in a magistrate’s court, without limit of amount, as a civil debt.
Editor, the NIS was never intended to profiteer off the interest due by charging interest on interest, the present interest is already higher than the commercial bank overdraft interest rate making the law oppressive, and placing additional burdens on people to pay their contribution, especially in difficult financial times.
Due to my ignorance of the NIS law, I was forced to learn after usury was placed on my account. I came to realise that the NIS is collecting hundreds of millions of dollars in interest on contributions due. Maybe the second largest income by profiteering off interest. Editor, the words, (any other rate) in Section 44 (1) doesn’t mean compound interest, if compound interest is to be charged it has to be written in the law and not hidden under the words (any other rate ). The people have a right to know beforehand that the NIS holds the authority to charge compound interest. This is the general principle of compound interest.
At present, thousands of self-employed persons cannot bring themselves into compliance with the NIS, because they are asked to pay millions in interest for contributions due for the years that they were working, but were not registered. It is almost impossible for many people to pay off backdated contributions with the present rate of interest on contributions
Editor, the NIS never should have been in such a state, because only about 30% of the total amount of persons that paid their contributions and qualify for a pension may live after 60 years or just over. Also, hundreds of millions may have been collected from persons who may not meet the qualifying amount to collect a pension, and the other benefits which they may have to collect are very small when you take into consideration the number of contributions made. Thousands may have paid contributions but may hardly get sick to go to the private hospital to collect a receipt to ask the NIS for a refund.
Thousands of persons may file little or no claims for the percentage of refund which is allowed by the NIS, due to the time it takes the person to run up and down, and the time it takes to process and approve. The NIS is a good insurance but needs to be reformed, it does not make sense for the NIS to invest people’s contributions in companies and government bonds who then are forced to pay high-interest rates on overdrafts when the profits from companies or bonds are small. Editor, when money is tied up in bonds or other investments, the NIS would not have much money to give a better benefit. By law, your benefits are based on the contribution you make, but the law does not allow persons to receive the pension if they defaulted, although after demands by the NIS, persons can bring their contributions and interest up to date.
If the NIS is forcing persons to bring their contributions up to date while charging high interest and compound interest on contributions due, the interest will only make things more difficult for the individual to pay, and what makes things worse is when persons realise that although they pay off the NIS they are not entitled to a monthly pension. NIS has a payment system for debtors which is time-consuming, the payment systems need to be modernised, facilitating the payment by debit cards, MMG and other payment systems.
Support is needed to stop this unjust system of high-interest rates and compound interest, President and citizens of Guyana.
Sincerely,
Michael Carrington
