‘NIS best investment for young people’

The National Insurance Services (NIS) is, and with reforms, will continue to be the best investment option for working people in St Vincent and the Grenadines (SVG).

“Today, tomorrow and with the reforms that are going to be instituted, the NIS is, remains, and will be by far the best investment that any working person can make with their money…,” Prime Minister Dr Ralph Gonsalves said at a recent press briefing.

The Prime Minister’s comments came on the heels of recommendations made under the 11th Actuarial Review, prepared in August 2019 and submitted in August 2021.

Mandatory contributions by the self-employed and those in the informal sector, which includes farmers, fishers, vendors, van drivers and other trade workers have been listed as a “high priority” recommendation in the review report.

During a stakeholder consultation with the media on Monday, August 21 at the UWI Open Campus, NIS Executive Director Stewart Haynes described the options to improve the long-term sustainability of the Fund as “quite narrow”. They include an increase in the contribution rate, a gradual increase in the pension eligibility age, as well as measures to discourage persons from taking early age pensions.

Speaking at the press briefing, Gonsalves said the money that contributors put into the NIS during their working years is given back to them many times over when they retire.

“…On an average, you live some 15 or so years after you reach your retirement.

“All… what you put in, at the lower level of the income scale, you get back between 18 months and two years all the money that you put in, and at the higher level, between three to four years, all the money that you put in…

“And all you’re getting after that is brotha and brotha and brotha. From what? From employers contribution and investment monies,” the Prime Minister stressed.

He added that the current structure of the NIS, without reforms, will create problems by 2034 and while he is unlikely to be around, he cannot sit back and allow the problem to fester as he is a responsible person.

“And if I’m not around, ants will bring the news to me and tell me people saying ‘praise God that Ralph did institute the reforms’…ants would bring the news for me as old people say,” Gonsalves, a former finance minister said.

He said many institutions in the world that play similar roles like the NIS are facing similar structural challenges and you have to have a leadership courageous enough to make the reforms.

“People are living longer and the growth of the population is slowed so that over a time you will have the growth of fewer younger people coming on to the system as contributors than those retiring,” Gonsalves explained.

He revealed that between the 2001 and the 2012 censuses, the over 60 population increased by over 30 per cent, the highest increase in any sector of the population.

The Prime Minister said that while it is true that the largest cohort of the population is under 30, the growth of that demographic is far less than the growth of the older population.