The government must look at ways to diversify the National Insurance Board’s (NIB) investment opportunities in order to strengthen the fund, as well as ensure that the level of exposure to the government is not such that if the government experiences challenges, so does the fund, Group Chief Executive Officer of Fidelity Bank and Trust Gowon Bowe said yesterday.
As the fund creeps ever closer to the time that has been predicted it will become insolvent – around 2030 – the government is mulling over what to do to keep that from happening.
Bowe said whatever should be and can be done to ensure that NIB continues to have Bahamians’ contributions available to them when they are needed, should begin to be done now.
“So for persons like yourself and I who are contributing today, is it an acceptable proposition that we’ve made contributions and the fund will have no monies to make any benefit to us later on? And that is saying that, okay, if we want to be generous and donate our contributions towards our parents and our grandparents, that’s magnanimous of us, but in reality, the government can’t make that decision, and as a fund, it should be looking forward to the future to say all contributors will get a benefit coming back,” said Bowe.
“We can kick the can down the road, but you know what, we are already down at the end of the road. We’re at the cul-de-sac. So there ain’t no further road. We can either turn around and head back and do some of the things like look at the administrative costs, look at the generosity of the benefits, look at the retirement age and look at the contribution rate.”
Royal Fidelity Group President Michael Anderson said yesterday that not much else can be done with the fund other than to have contributions increase, and for NIB to understand its particular role in terms of how it spends fund money.
“If you’re going to broaden the role of NIB, you can’t expect NIB to continue to fund itself with just those contributions,” said Anderson.
“If you do more things. If you’re just going to fund pensions, you still need to increase it, but if you’re going to fund more than pensions, there’s no way that it can actually afford to cover those other areas.”
Myles LaRoda, the minister responsible for NIB, said yesterday that the fund will use all of its capabilities to get companies that owe NIB contributions to pay. He said every month the fund issues a report listing companies that have been taken to court for not paying contributions.