By LEANDRA ROLLE

Tribune Staff Reporter

lrolle@tribunemedia.net

MYLES Laroda, Minister of State with responsibility for the National Insurance Board, said yesterday the government will have to make a decision next year concerning the state of NIB’s fund, which he says remains on target to lose about $70m this year.

In the meantime, he said the government will continue considering its options on how it can ensure the fund’s sustainability.

These options include cutting back on costs or raising revenue or doing both, he added.

“The fund is no better, or no worse than the last time we spoke,” Mr Laroda told reporters when asked for an update on the agency’s financial position before yesterday’s Cabinet meeting.

“The government is going to have to make a decision in the upcoming year as to what its position is going to be as we move forward as it relates to the increase. I think the fund is on pace to lose around $70m plus this year, that’s about $6m a month.”

 “And in the upcoming year, even though there’s no projected improvement in revenues, it’s still not gonna make up that black hole so notwithstanding the economy just opening up and businesses may be doing a bit better, there is still tough times in our community, but that decision will have to be made and it’s being considered.

 “We just don’t have a date yet for informing the public on what the decision is going to be.”

 The Tribune has previously reported about the dire straits of the fund over the years.

 Most recently, this newspaper exclusively reported in April that the 11th actuarial review of the National Insurance Board predicted the fund could be depleted by 2028.

 That report had reduced the fund’s potential depletion timeline by one year, as the 10th review had made a prediction of 2029.

 It also recommended NIB to increase the contribution rate by two percent and continue increases every two years until 2036.

 Yesterday, Mr Laroda reiterated that the report’s findings will play a big factor in the government’s decision regarding NIB.

 “The 11th actuarial report in repeating the other actuarial report is stating the dire state of the fund, which is predicted to run out in about six years and so that has to be heavily on the government with regards to making this decision,” he continued.

 “If there is a collapse of it, those funds for people who would have paid in for 40 years, those funds will have to come from somewhere, some form of tax revenue. So, hopefully we have this matter resolved in the not-too-distant future.”

 The current state of the fund has led some observers to believe that the government plans to increase NIB contribution rates next year, especially considering the increase of the national minimum wage.

 Asked about this yesterday, Mr Laroda could not say, only telling reporters that a decision would have to be made by the government.

 “Either we’re going to cut costs or we’re going to raise revenue or a combination of both,” he added. “And so, I can’t see the government at this time reducing the amount of benefits, but again, that’s just not my decision to make. That’s one for the full government to make and hopefully that will come shortly.”

 After COVID hit in 2020, NIB paid out more than $100m in unemployment benefits to support thousands of Bahamians who were laid off during the health crisis.

 Once NIB’s 13 weeks of payments stopped, the government introduced its own COVID unemployment programme to provide further income support to jobless Bahamians.

 More than $200m was spent on the unemployment benefit scheme by the government at end-September 2021.

 The number of benefits paid out over the years has left NIB reserves in a state of decline.

 This is because payments have exceeded the incoming contributions since 2016, NIB had previously said.