NIS reform not put on ice
THE EDITOR, Sir:
Reference is made to your editorial, titled 'Why the silence on NIS reform?'(Gleaner, February 14, 2017).
The Ministry of Labour and Social Security welcomes critical appraisal of its work and portfolio matters. We appreciate your observations relating to the National Insurance Scheme (NIS) and, in particular, reforms being undertaken.
The ministry will be pursuing a package of reforms as approved by Cabinet, aimed at ensuring the long-term sustainability of the scheme as an immediate priority, and enhancing the coverage, governance and efficiency of its administration over the medium term.
The comprehensive reform of the NIS is being undertaken on a phased basis. The first phase involved the passage of legislation to allow for actuarial reviews every three years, instead of five years. This legislative amendment was piloted in my capacity as minister of labour and social security in October 2016.
This action will ensure closer monitoring of the National Insurance Fund (NIF); enable assessment of the effectiveness of reform measures; facilitate the implementation of timely interventions; and provide greater transparency and accountability.
Phase Two will see the commencement of another actuarial review during financial year 2017-18. We will also be improving the NIS's administration and the modernisation of operations for greater efficiency and accountability.
It is in this context that an additional $215 million has been allocated in the 2017-2018 Budget to address some reform measures. These will include the following:
- Reverification of pensioners and cleaning of employers' database: This process is important to ensure the accurate forecast and receipt of contributions.
- A review of the NIS operations and a complete rollout of a new information technology system in order to strengthen the operations and to reduce pension processing time.
- Critical research to establish baseline awareness and perception of the NIS. This will be done in an effort to expand the coverage of the scheme.
- Compliance training to improve efficiency and effectiveness.
- Procurement of additional equipment to support the modernisation of the NIS.
Although the NIF continues to perform credibly, increasing in value by 11.94 per cent for the fiscal year to date, an evaluation of the governance structure, investment policies and asset allocation strategies will also be conducted in the upcoming financial year to ensure continued growth.
Phase Three will involve additional changes such as an adjustment in the contribution rates, the insurable wage ceiling and benefits payable, and this is scheduled for the 2018-19 fiscal year.
In the meantime, the ministry will improve its public education and sensitisation efforts to increase public awareness about the way forward.
I use this opportunity to assure pensioners and contributors that the ministry remains committed to ensuring the long-term sustainability and stability of the scheme.
SHAHINE ROBINSON (MP)
Minister of Labour and Social
1F North Street