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INDEPENDENT Senator Sophia Chote says she is surprised that the National Insurance System (NIS) has not already collapsed, noting that warnings about the fund’s depletion had been raised as far back as 2018. In her contribution to the budget debate at the Senate sitting yesterday, she criticised the former administration for not addressing the issue and commended the United Nation Congress-led Government for taking action. She noted that Parliament held an enquiry into the NIS in 2018, during which stakeholders from across the country were heard, and the Ninth Actuarial Report of the National Insurance Board (NIB) was reviewed. “That report said that the fund was going to be depleted by 2029 to 2030. So we knew that in 2018 and yet absolutely nothing was done,” she said. She said this is “painful” for her, as she pointed out that the pensions provided under the NIS system serve as a cushion for many workers who have spent their lives in low-income jobs and rely on these pensions. She noted that the Tenth Actuarial Report spoke to the same issues affecting the NIS system. “It appears as though no one listened. Parliament’s work was ignored. While these reports were made to Parliament, no steps were taken,” she said. Chote explained that there are different branches of the NIS—the short-term branch, which deals with sickness, maternity, and funeral benefits, among others, and the long-term branch, which covers pensions, invalidity, and survivor pensions, where the heaviest drawdowns occur. “What has happened is that we have never put in as much into NIS or NIB as we’ve taken out. And that has continued historically. And NIB’s investments have not increased. In fact, they have gone down. Foreign investments have contracted, obviously, because if you don’t have forex, what are you going to be investing?” she said. Chote said the NIB 2024 report shows that the country is now in a situation where 83.45% of payouts fall within the long-term category. “I am surprised that the system has not already collapsed,” she said, again reiterating that this problem was known since 2018. She said there are well over 200,000 people who rely on this cushion. “It is amazing that the system has not collapsed. And I am grateful that some steps are at last being taken to remedy the situation. Now, whether these steps are sufficient, or whether they will simply permit the NIS to have a longer life, I cannot say,” she said. The UNC-led Government has taken the decision to increase the NIS retirement age to 65 and to raise contributions on a phased basis. Chote said people are concerned about the increase in the retirement age. However, she noted that other Caribbean countries were already extending the retirement age or were contemplating it, so what T&T is doing is nothing new. “It fits in with the way in which other Caribbean territories, our neighbours, are managing their affairs. So there is nothing to be afraid of there,” she said. Chote said she tried to trace the history of the NIS issue to show that there had been a deliberate disregard for what was happening. She recalled that on June 25, 2021, a statement was made in Parliament by then-finance minister, Colm Imbert, who advised that contributions to the NIS had declined by 4%, there had been an increase in the number of beneficiaries, administrative costs had risen by 14.3%, and the net yield of investments in 2021 was about half of what it had been in 2019. “So not only was this system going down, but it was going down at a speed, and apparently nobody was prepared to put a boulder on the road to try to stop it. So I have to say that I’m grateful that steps are being taken. The steps may have to be vigorous, but I think it is something we have to endure,” she said.
