Pensioners’ dilemma

A phone call from her daughter a week ago turned Janet Hall’s anticipation of comfortably retiring into complete dread.

The 65-year-old former preparatory school cafeteria chef was told that her National Insurance Scheme (NIS) payments, which were consistently deducted from her monthly salary for 18 years, were not being paid over to the Ministry of Labour and Social Security.

These NIS payments were the only financial preparation she made for retirement. The news left her stupefied. Her pension was all gone.

“I was shocked! I said how comes … after 18 years??? Why?” she asked incredulously.

The NIS, which is a compulsory contributory-funded social-security measure, covers employed people in Jamaica. It offers some financial protection to the worker during retirement or a period of income loss, arising from injury on the job, sickness, or death of a breadwinner.

NIS pensioners also automatically qualify for a health insurance plan which provides comprehensive medical coverage, with the premiums being paid by the pensioner to access this benefit.

A total of 2.75 to three per cent of the employee’s gross salary is deducted by the employer for NIS, which is matched by the company and the total submitted to Tax Administration Jamaica.

The contributions are managed and invested by the National Insurance Fund (NIF), from which pensions and other benefits are paid.

However, according to data from the Ministry of Labour and Social Security, which oversees the agency, an increasing number of companies have not been paying over the deductions, leaving many employees unprotected.

The ministry’s Chief Technical Director Audrey Deer Williams told The Sunday Gleaner that her office has seen a consistent increase in the number of delinquent companies over the last five years – moving from 1,683 for the period April 2017 to March 2018; to 2,656 from April 2021 to March 2022.

HER ONLY PENSION

Hall told The Sunday Gleaner that her first interaction with the government agency was 22 years ago when her husband, a company messenger, died. A single mother of six, she said she received a lump sum payment from the NIS as well as financial support for her youngest daughter who was nine years old at the time.

The Happy Gate, St Andrew resident said she took the opportunity to enquire about her contributions from the now-defunct private school where she worked, and the agency confirmed that payments were being made.

In 2016, she said she made another check, and again two years ago.

Her final check was a few months ago.

“I went there (NIS) in January of this year, sign up and everything. They said that in six months to a year time I’ll start receiving whatever they have for me,” Hall said.

“Only to hear my daughter said they called her and told her there is no pension there for me cause no money was paid,” she lamented.

Her job as a chef saw her earning a gross salary of $18,000 monthly. And although she said she made do, it was not easy. “I don’t know how I coped, but I coped. To be honest, that money couldn’t afford me to pay any (other) pension for myself,” she said.

In 2010, the St Andrew-based school closed down, and her first and only formal employment arrangement ended. Hall went on to do days’ work as a domestic helper, and worked as a coffee farmer to support her family.

But Hall, who suffers from hypertension, said she is no longer able to do any of those tasks, and was looking forward to retirement. And although her now-grown children can assist, she insists that they were not her pension plan.

“I don’t want to be solely dependent on my children for everything because they have their lives to live. I don’t have anybody taking care of but myself, so I need my likkle pension,” she said.

LEGAL ACTION AGAINST DELINQUENT COMPANIES

The Ministry of Labour and Social Security said despite the number of measures taken by the NIS to deter cases like Hall’s, the delinquency is on the increase.

The measures include islandwide inspection by over 80 NIS inspectors, as well as reminding employers via calls, letters and emails to file and make payments. Payment arrangements are also negotiated with companies that are unable to pay outstanding amounts in full.

“Public education sessions are conducted by all NIS inspectors and compliance officers to sensitise workers and employers on, among other things, the statutory requirements and the attendant penalties regarding non-compliance,” said Deer Williams.

Section 48 of the National Insurance Act states that if an employer fails to pay over the deductions, then the employee is entitled to recover it from the employer in the civil court.

When legal action is taken against delinquent employers, a penalty of 20 per cent interest, which is calculated daily, is charged per annum on all outstanding amounts.

“Employees are advised to report to any NIS office all employers who are deducting contributions and not filing the returns and submitting/remitting them to the NIS. Once this is done, investigations are conducted and the requisite action taken against these employers,” Deer Williams told The Sunday Gleaner.

NOT TAKING PENSIONS SERIOUSLY

Alarmed at the exploitative actions of some of these companies, ageing expert Professor Denise Eldemire-Shearer said cases like Hall’s are brought to her attention “all the time”.

“You can’t take people’s money and not pay it over, it’s just not right,” she said.

This practice, she argued, is evidence of the scant regard that Jamaicans place on pension plans, which she said is to their detriment.

“We as a people are just not taking pensions seriously enough. I bet you if you check those same employers who are not paying over, they don’t have a personal pension plan. When you look at the figures of who is contributing to private pension, it’s only 18 per cent of the country,” Eldemire-Shearer expressed to The Sunday Gleaner.

She declared that there needs to be a culture shift in how pensions are viewed by Jamaicans, buoyed by a public education programme and by the NIS digitising its system to make it easier for persons to check on their payments.

Eldemire-Shearer is encouraging employees to ensure that they keep all documentation of their statutory deductions, especially pay slips, so that if necessary, it can be resolved through the courts.

Luckily for Hall, she diligently kept her pay slips over the years, and intends to fight to ensure that she receives what is due to her.

“If it’s even two dolla, I want it because it is mine. I work for it,” the retiree declared.

‘I AM DISAPPOINTED’

Facing the same predicament, Hall’s former colleague, Naketa Anderson, was not so proactive. She learnt recently that her NIS contributions over 20 years from the same institution were also not paid over. However, she has no documents to prove that the deductions were taken from her salary.

With a few years to retirement, the primary school teacher is worried about what will happen.

“I am getting to that age, and I am going to need it. I am disappointed … I cannot believe, I don’t know why people would do something like that,” Anderson shared with The Sunday Gleaner.

Financial difficulties faced by the institution pushed Anderson to resign shortly before it closed down. But even then, she said she did not expect this level of negligence, especially as they had paid over her National Housing Trust deductions which she was able to benefit from.

“I know that the institution was having financial difficulty but in the end they said that they would pay it up,” she said. “I don’t think it was a deliberate act of not paying it over. I think it was just lack of finance. They should have said something to us. We would prefer if they come and say ‘we are unable to pay over this, give us time’.”

After this experience the mother of three is more inclined to check on her statutory deductions and is encouraging others to do the same.

“Persons have to take the time to go and check to make sure the payments are being made,” she said.

‘IT IS JUST IMMORAL’

For the cases that executive director of the National Council for Senior Citizens (NCSC), Cassandra Morrison, sees from “from time to time”, the lack of documentation is also a major issue.

She said quite often the senior citizens do not have pay slips to prove that deductions were withdrawn and in other cases, the company no longer exists for the law to take its course.

She also noted that quite often, no formal report is made either.

“You would be speaking to a group of senior citizens and it’s anecdotal that you would hear that they know of persons who are experiencing these issues,” she shared with The Sunday Gleaner.

Morrison explained that low-income retirees are the ones mostly affected, and like Hall, their NIS payments are their only retirement fund.

“It is just immoral,” she said. “When you deny the person of this right it is really unjust and it’s cruel and it’s illegal.”

When these cases are reported to the NCSC, she said they are directed to the “very responsive” NIS who conducts their investigations.

Additionally, retirees are also guided to other non-contributory funds, such as the Programme of Advancement Through Health and Education (PATH) and the Social Pension Programme which is available to persons over the age of 75. The NCSC also assists them in accessing grants available through the labour ministry to support income-generating activities.

Morrison is also urging citizens to be more proactive with keeping track of their statutory deductions.

“Even once a year, just check with the NIS office in your parish, or just call with your NIS number and ask somebody to check to see if your deductions are being paid over,” she said.

“I know the system should work for all of us, but in light of everything I believe a little extra personal responsibility would help those persons out there who really are unsure.”

sashana.small@gleanerjm.com

KEEP TRACK OF YOUR NIS PAYMENTS

n Contact the NIS office at least once per year to get an update on the status of your contributions; to ensure that your names are filed on the annual returns; that your employer is compliant in filing and making payments on time; and to ensure that the correct amount is being deducted.

n Always keep your employment documents, especially pay slips, as proof of deductions made.

n Report any delinquent cases to the NIS, which they will investigate.