By LETRE SWEETING

Tribune Staff Reporter

lsweeting@tribunemedia.net

THE National Insurance Board may lose nearly $100m this year now that Prime Minister Philip “Brave” Davis confirmed there would be no contribution rate increase until July 1st, 2024, deepening the fund’s woes.

Myles Laroda, State Minister in the Office of the Prime Minister responsible for NIB, said during a communication in the House of Assembly in March that the fund was projected to lose $98m in 2023 if contribution rates did not increase.

Yesterday, Mr Davis cited the strain of the global inflation crisis when explaining why the recommended rate increase would not happen this year.

“We do not wish to impose any additional burden,” he said. “We hope that a full year’s advance notice will allow all impacted the time to plan to accommodate the increase.”

 Mr Davis said there would not be a significant rate increase next year to make up for not raising rates this year.

 “We can assure you that will not be the case,” he said.

 Mr Laroda, who has repeatedly warned of NIB’s dire state, said in April that the contribution rate must be increased by 1.5 per cent three or four times in the near future to stabilise the fund. He said extending the retirement age, cutting benefits or combining these two options would not solve the problems.

 Similarly, the latest actuarial valuation of NIB said immediate and recurrent increases in the contribution rate were necessary to save the fund, warning that the fund could otherwise be depleted by 2028.

 “It is important that Bahamians know that we will use the year to come to implement significant reform at NIB,” Mr Davis said yesterday. “We intend to make our system more efficient and more user-friendly. Bahamians deserve a simple and transparent process. We will continue to scrutinise claims to prevent fraudulent activities and ensure that those who contribute are the ones who benefit.

 “The rate increase beginning in July 2024 will therefore be accompanied by enhancements to NIB’s service delivery, accountability, compliance efforts, and sustainability. Our goal is not merely to ensure the longevity of the NIB but to create a system that truly serves its purpose: to support Bahamians when they need it most.”

 Critics will be eager to learn how the government could delay increasing contribution rates and avoid increasing rates by more than 1.5 or two per cent next year.

 In 2022, NIB contributions totalled $280m while benefit expenditures totalled $355m –– a $78m shortfall, according to Mr Laroda, who said NIB had not turned a profit since 2016.

 After the NIB announcement yesterday, Mr Davis and Free National Movement Leader Michael Pintard traded volleys.

 “For at least a year,” Mr Pintard said, “the public has been subjected to the circus of conflicting statements by the minister of state with responsibility for NIB (who forecasted the necessity of an increase) and the prime minister (who told a different story) on whether NIB rates would be increased. Yet, no significant action or reform was taken to address NIB’s challenges. So uncommitted to correcting their non-compliance, the government has hired persons and rented facilities from entities that owe a staggering amount of funds to NIB.”

 In response, Mr Davis noted NIB’s issues are not recent and that the FNM did nothing to solve the problem.

 “The FNM chairman Dr Duane Sands,” he said, “previously stated that NIB’s fund has been in a precarious position for many years, suggesting its projected six-year depletion timeframe unsurprising. This frank admission from the chairman of the FNM underscores the importance of the measure we are taking. It also highlights the failure of the Free National Movement to act when they had the chance.”