The National Insurance Scheme (NIS) will be 39 years old on April 10, 2011. After almost 40 years in existence, national insurance consultant Hubert Dolsingh feels that the NIS is the "best social programme ever introduced by any Government to date, but it is badly administered." "The National Insurance Board (NIB) manages the system by taking a percentage of the contribution revenue to manage the system, and I have calculated from their last financial report that they spend about $470,000 a day to administer the system. They collect more than $2 million per business hour in revenue, based on my contributions from their financial reports," Dolsingh said.
No board, millions lost
Dolsingh says the National Insurance Board (NIB) lost millions in investments because of the length of time it took the new Government to appoint a new board after the general election in May last year. A new NIB board was eventually appointed in December. The last chairman, Calder Hart, resigned in March 2010. "It took nine months for a chairman and board to be appointed. There was sufficient time between Hart's resignation and elections for the PNM to have appointed a chairman," he said. Dolsingh estimated that "more than $50 million" in investment income was lost.
"I am certain that the board has lost million of dollars in investment incomes. There are certain investments that could not have occurred or could not have been established without the board's approval. "I am certain more than $50 million. The board has about $20 billion in assets. You could imagine most of that is being invested. I am certain there was a slowdown in the investment portfolio. That slowdown meant a loss to the board. They must tell us the quantum of that lost," he said.
Dolsingh said the NIB last produced a financial report in 2009. "The financial report for 2010 has not yet been presented to the Government. "According to the (National Insurance) Act, the board is obligated to submit to the Government such report by August of each year, and the line Minister of Finance has until November of the year to table it in Parliament. None of this has been done. "So couldn't the chairman have got this done? The whole thing is in chaos right now," he said. Dolsingh questioned what justification the previous board applied to invest millions in Clico Investment Bank (CIB).
"I understand the previous board invested $700 million in Clico-unsecured loans. The public must know who authorised that $700 million in investment and what encouraged them to invest in Clico. Was it the interest rates? Was it some direction from the political side?" He raised the issue of the last chairman of NIB having conflicting roles because he also chaired several NIB committees: finance, investment.
"Remember that Calder Hart was the chairman of the board. He was also chairman of the finance committee and,he was also chairman of the investment committee of NIB and also chairman of Nipdec (National Insurance Property Development Company Ltd). "This means when they want to invest money, they go the finance committee; he chairs it. Then they go to the investment company to source the funds, then they go chairman of the board to approve it and he was the chairman. Was this a conflict of interest?" Dolsingh asked.
The self-employed and NIB
Another fallout from the period of time with no board was the promise to have self-employed persons qualify for NIS, he said. "The last board had promised this. The board has stated in their financial report that self-employed persons should come on stream. Of course, they have been promising this since 1973. We have almost 120,000 self-employed persons in T&T, which includes the double vendors, the coconut vendors, all those small business owners, PH drivers and maxi taxi owners."
Dolsingh said it is "unfair" that NIS covers foreign workers. "I have no objections to foreign workers coming to T&T, but they must not be included in our national insurance system. This means when a foreign worker returns to his homeland, he is still covered by our NIS system. "If a foreign worker comes here, works for a year and then returns home and he dies, his widow is entitled to $1,500 a month. The problem is that has to be converted to foreign currency, then paid. While, if a Trinidadian has paid contributions from 1972 to this date and you die, your widow collects less $1,100 a month. It's unfair."
Raising the retirement age
Dolsingh said that senior citizens who have never made any contribution to any funds receive more than people who have paid their NIS. "How can you pay a non-contributory system of $3,000 a month and pay less to a person who pays contributions? It's not fair. I'm appealing to the NIB, they must revise that rate of contributions." Dolsingh suspects that Government will be raising the age of retirement for those who have to access NIS pensions. "I want the board to tell the public that the retirement age of 60 years shall not be increased. The rationale behind this is people are living longer. Many countries are doing this. I believe that they could raise it to 70 years in this country, for old age pension and everything."
New NIB chairman
Dolsingh has no problems with the choice of Ravi Ramoutar as the chairman of NIB. He said that Ramoutar, a chartered accountant, is "suitable" for the post. "He has had enormous training in investment and finance. He is one of the best persons chosen for this position," he said. There have been criticisms that Ramoutar is not suitably qualified as the National Insurance Act states that the person chosen for the position must be independent of government, business and labour.
Dolsingh said the Act was adhered to as Ramoutar was "properly selected" in the opinion of the Finance Minister. "These people are forgetting the words in the Act which says, 'in the opinion' of the Minister of Finance. It means it is his opinion that this person is independent of labour, business and government. In reality, you cannot get someone who is separated from business, government or labour," he said.