NIB Officials: Focus on Sustainability | Local company

The National Insurance Board of Trinidad and Tobago (NIB) has again called for urgent reform of the pension system as there continues to be a substantial gap between its benefit expenditures and its revenue from contributions.

NIB executive director Niala Persad-Poliah said yesterday that benefit spending in 2020 was $5.3 billion, but the board collected only $4.6 billion in dues, leaving a deficit of about $700 million.

She said the NIB has had to tap into other sources in order to continue paying benefits to those who have reached retirement age.

Persad-Poliah was speaking at a meeting of the Public Accounts Committee held to investigate the NIB’s audited financial statements for the years 2014 to 2020.

“So what we have from 2013 is that our benefit expenditures have increased and that’s really because of the aging of the population. And, of course, people are living longer and have a lifestyle healthier life,” she explained.

“During the period from 2013 to 2019, we would of course have used our realized investment income to support benefit payments.”

However, she said, as of 2020, premium income and investment income combined were still insufficient to support benefits and administrative expenses.

She said this deficit is expected to continue in the future.

She noted that the NIB, along with recommendations from the actuarial reviews, had indicated several steps that could be taken to address the issue.

One of the recommendations was to gradually increase the retirement age from 60 to 65.

NIB Chief Operating Officer Feyaad Khan noted that the latest actuarial review indicated that it takes contributions of 3.2 people to support a single retiree and that this number is expected to decrease further over the course of the year. for the next 50 years, with one contributor taking care of a single retiree.

He said if the retirement age was raised there would be more contributions because people would work longer and benefits would have to be paid for a shorter period.

“That is why, as an actuary, it is a recommendation that we repeat over and over again, as the most impactful step to ensure the sustainability of the system. »

Other recommendations made in the actuarial review were to gradually increase the contribution rate from 13.2% to 16% and to freeze the minimum pension at the current level of $3,000.

Questions about the President

During the meeting, committee chairman Davendranath Tancoo and committee member Jearlean John attempted to raise the issue of the appointment of businessman Patrick Ferreira as chairman of the NIB. They questioned the legality of the appointment.

Ferreira was originally named to the NIB board as a government candidate but was elevated last month to chairman.

The NIB Act states that the board should be made up of 11 people, with government, business and labor choosing three people each. The law states that the chairman must be a person who, in the opinion of the minister, is independent of government, business and trade unions.

As the government’s nominee for the board, Ferreira’s appointment was seen as a violation of the law.

Tancoo said Ferreira’s appointment risked bringing the NIB into disrepute. He asked Persad-Poliah if the NIB had received any legal advice regarding Ferreira’s appointment. She said no legal advice was sought or received.

John also questioned the appointment, saying the NIB is not above the law.

However, committee member Dr. Amery Browne objected during Tancoo’s and John’s comments, saying the issue of the NIB president was outside the committee’s mandate. Browne said the committee’s mandate was to investigate the board’s audited financial statements and that issues surrounding Ferreira’s appointment would best be raised in a motion in parliament.