By EARYEL BOWLEG

Tribune Staff Reporter

ebowleg@tribunemedia.net

MYLES LaRoda, minister of state with responsibility for the National Insurance Board (NIB), warned that if there is no raise in the contribution rate this year the National Insurance fund will lose $95m.

The sobering words were delivered before the weekly Cabinet meeting yesterday morning.

It was reported by The Nassau Guardian that Cabinet had greenlit a rate increase which is believed to take effect July 1. However, Mr Laroda said he won’t “confirm nor deny” when asked about the newspaper’s article on NIB.

 While being mum on the issue, Mr Laroda simply repeated that details will be coming.

 “I said last week there has been a decision and that has been made with regard to the increase in contributions and that information will be the details that will be given in due time,” he said.

 He explained the board and executives of the NIB have sent a series of recommendations because an actuarial report on the fund speaks to certain deficiencies as it relates to the board.

 “I will give you an example. There’s a lot that has been made about the management structure and I went into details last week. We are an archipelago and so we are replicating things over and over again,” he said.

 “I don’t want to shock Bahamians, but the reality is if there is no raise in the contribution rate this year the National Insurance fund will lose $95m. That is just not sustainable and we have everybody doing their own chair quarterbacking.

 “The facts are this: the National Insurance Board will pay out $27m each month in pensions. We’re collecting $23m. That leaves a shortfall of $4m a month times 12 - that’s 48 million. We’re not even considering the industrial benefits and other benefits that are being paid out.

 “There are statements that have been made if you go in compliance, if you go and collect the outstanding that is pegged around $30m if I heard that correctly that’s still only one month of contributions.”

 He pointed out that some of the issues as it relates to National Insurance are not things that “we can blame anybody for”.

“Can we blame our citizens for living longer? No. And so if they are collecting their pension benefits that could be as much as 20 years when it was about 10 years to 12 years in the beginning. This is where we are.

“We have a situation where in next year we’ll make 50 years since National Insurance has been there. We’ve had one increase that was in 2010. People are living longer. They’re collecting more benefits. The ceiling has raised from $400 to $700 plus dollars. These are the things that we’re dealing with.

“And if we have been losing monies from 2016, for the past seven years, even those cash assets, the CDs that you had, you have to crack those, why? Because the government cannot subsidise the National Insurance fund. It’s paid for by contribution or investments on rent that’s been collected. So it sounds sexy that everybody has an opinion that one area is causing, whether it be management or whether it be administration costs.

 “That is but a small part of it. I just gave you simple mathematics this month, some 44,000 people are collecting some form of pension benefits. Twenty-seven million is going to be paid out — 23 is going to be collected. You do the math. That’s just on the pension and we have a lot of people who are collecting disability benefits and others and so that’s where we are.”

 Last week, Prime Minister Phillip “Brave” Davis refused to reveal whether the government intends to increase National Insurance Board contribution rates.

 Mr Davis repeated that he does not intend to further burden society’s poor working class. He said a rate increase is an option for the government, however, they are aiming to identify the next course of action.

 The Tribune exclusively reported in April 2022 an actuarial review of the National Insurance Board predicted that the fund could be depleted by 2028 should officials neglect to take urgent action.