Rolle: All options being reviewed on issue of NIB contributions increase
Minister of State for the Public Service and National Insurance Brensil Rolle told Guardian Business yesterday that the National Insurance Board (NIB) is reviewing “all of its options” on the issue of increasing contributions. He insisted that “government has not at this time looked at a position for increasing anything or decreasing anything”.
Government has been urged by several economic watchdogs, including the Inter-American Development Bank (IDB), to increase Bahamians’ NIB contributions in order to stave off the collapse of the fund due to the huge financial obligations from pension liabilities.
A footnote in the IDB’s country strategy 2018–2022 explains: “The accounting firm KPMG also warned that public sector liability due to pensions will be unsustainable by 2032, and could trigger a fiscal crisis and large increases in the national debt beyond the already concerning elevated levels.”
Rolle said this has been a position of the IDB as well as some officials at NIB for a long time. However, successive governments have not moved to correct the problem.
“NIB is reviewing all of its options, but basically what has happened is benefits have increased, contributions have gone down and that is a consideration that the government at some point has to seriously look at, and we are internally looking at it, so as to provide an option for the government,” said Rolle.
The IDB said NIB commitments amount to 160 percent of gross domestic product (GDP), while being underfunded.
“Fully funding these pensions would require increasing the social security payroll tax from 9.8 to 20.3 percent – a 107 percent increase,” the IDB notes.
“Pension liabilities are also projected to increase faster as a percentage of GDP in The Bahamas, compared to the United States by 2060, reaching 41.6 retired Bahamians per 100 workers (from a current 1:10 ratio) compared to 36.8 per 100 workers in the United States,” the IDB points out.
Education: Florida International University, BS in Journalism
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