NOVEMBER 22ND, 2019 – NOVEMBER 29TH, 2019
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VOLUME 15 - NO. 46
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NIB RATES WILL INCREASE
by Hayden Boyce Publisher & Editor-in-Chief
T
he National Insurance Board’s (NIB) contribute rates will be increased by 2021 to ensure that future generations can be adequately covered and compensated. This was stated by Premier and Minister of Finance Hon. Sharlene Cartwright Robinson while laying The National Insurance Board’s 9th Actuarial Report in the House of Assembly on Monday, November 20th, 2019. The Premier noted that although NIB is currently in a strong financial position, it has not proposed a contribution rate increase during its 27-plus years of existence, but has awarded significant increases in pensions and other benefits. She said if not action is taken, the NIB’s funds could be depleted in the next 30 years. “While some of these dates may appear in the distant future, in less than a decade, the contribution income alone will no longer be sufficient to meet the Board’s expenses. In less than 20 years we will need to draw on our investment income to cover costs; and within the next 3 decades the fund will be exhausted, if no action is taken,” the Premier stated. “To put this into perspective, however, consider a young contributor entering the workforce today. He or she, all things being equal, may contribute to the Fund for 40 or 50 years. If no action is taken, the fund is projected to be depleted by the time that individual becomes pensionable. To protect the fund for future generations, parametric reform will be required along the way. Good governance dictates that the decision makers for social protection plans make timely decisions to ensure the continued financial sustainability of the system, and the continued protection of a meaningful level of Reserves to protect the system for the long-term.” The NIB commissioned its 9th Actuarial Review as at March 31st, 2019 and it was done by
Gabriel Williams is TCI’s new Junior Minister of Tourism
T
he annual Turks & Caicos Islands Youth Congress was held on November 20th, 2019 at the Gustavus Lightbourne Sports Complex and Gabriel Williams of Maranatha Academy emerged as the new Junior Minister of Tourism. There were eight participants
Trinity Consulting Ltd of St. Vincent & the Grenadines. The actuary strongly recommends in this 9th Actuarial Review that parameters be changed, and consideration of these changes be given top priority by the decision makers to take effect no later than April 1, 2021. “The long term financial viability of the fund remains our paramount priority, and we are committed to working towards this goal,” the Premier stressed. “It is therefore imperative that the Board consider the recommendations of the Actuary and commit to making the necessary amendments as prescribed within the recommended timeframe. This will ensure that the fund continues to remain viable into perpetuity for future generations.” The reserves of the NIB as at March 31, 2019 stood at $282M (Audited). The plan is 41% funded with an unfunded
from public and private high schools throughout the country. 2nd Place went to Britney Gardiner of Raymond Gardiner High School and 3rd Place to Jordan Melhado of Clement Howell High School. Sixteen year old Williams told The SUN
she is elated and happy to be the new Junior Minister of Turks and Caicos Islands. The theme for this year’s TCI Youth Congress was ‘Developing Smart and Sustainable Caribbean Countries – Building Back Better’.
actuarial liability exceeding $390M, up from $297M in 2016. A 41% funded status means the NIB has 41 cents towards each $1 of accrued pension liability. The Minister of Finance said that in order to ensure the continued financial sustainability of the National Insurance Fund, and to seek to balance the intergenerational financial burden of providing an adequate range and level of benefits, across generations; a combination of contribution and benefit reform is recommended in the 9th Actuarial report. She noted that the current contribution income is projected to cover expenses until 2027, which is less than a decade away. “During the years 2028 to 2036, provided there are no reforms in the parameters of the plan, investment income will have to supplement contribution income to meet the fund expenses; and the accumulation of reserves will be
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at a slower pace. A cash flow deficit is projected by 2037, and the fund depleted by 2049. With no reform, the Fund will be depleted in 30 years,” the Premier stated. She noted that the Turks and Caicos Islands, is experiencing what is typical in maturing social security programs. The longer the plan is in existence, the greater the number of illegible beneficiaries and the higher the pension rates payable to those pensioners, she added. Additionally, she said, the TCI, like the rest of the world, is also beginning to see increases in early pensions due to increased incidences of Non communicable diseases (NCDs). The long-term benefit branch, which is the pension arm of the fund, presently accounts for 78% of National Insurance total cost; this cost is projected to rise to 93% over the 60-year projected period.