Parliament shortens timeline for actuarial review of NIS
The House of Representatives approved changes to the National Insurance (Amendment) Act, allowing for an actuarial review of the National Insurance Scheme (NIS) every three years, instead of the current five years.
Minister of Labour and Social Security Shahine Robinson, who piloted the bill, told lawmakers that the reduction in the review period would put the ministry in a better position to more closely monitor and take pre-emptive measures or make timely interventions to ensure the long-term sustainability of the state-run pension scheme.
She also told lawmakers that the NIS Reform Committee has completed its assessment of the most recent actuarial report done by Eckler Consultants.
"More frequent actuarial reviews will provide critical information that will support risk management and improved governance of the NIS pension funds. More frequent actuarial reviews will also assist in making long-term financial and investment decisions of the [National Insurance] Fund," she explained.
The reviews will allow for greater transparency and accountability, and will allow the ministry to monitor the effectiveness of reform initiatives, she said.
"The amendments proposed in this bill will support our efforts in ensuring the sustainability of the NIS and its ability to honour its financial obligations to contributors," Robinson told the House on September 28.
The report of the review done by the NIS Reform Committee is to be presented at the next Cabinet meeting.
The Eckler actuarial report projected that the National Insurance Fund (NIF) cash flow is at risk of being depleted by 2033 if serious efforts are not made to reform the present structure and operation of NIS. The NIF manages and invests NIS contributions.
At present, more than 112,000 persons receive NIS payouts and benefits.
In the 2015/16 financial year, $15.4 billion was spent on NIS benefits, while $12.8 billion was collected in contributions a gap of $2.6 billion.