Akash Sama­roo

akash.sama­roo@cnc3.co.tt

Lead Ed­i­tor Pol­i­tics

The Na­tion­al In­sur­ance Board of Trinidad and To­ba­go (NIB) says that while it un­der­stands the con­cerns of some cit­i­zens who will soon be re­quired to con­tribute more to the Na­tion­al In­sur­ance Sys­tem (NIS), it be­lieves the pro­posed in­creas­es are rea­son­able.

The NIB main­tains that the ad­just­ment is nec­es­sary to pro­tect con­trib­u­tors’ ben­e­fits and en­sure the long-term sta­bil­i­ty of the fund.

Min­is­ter of Fi­nance Dav­en­dranath Tan­coo an­nounced a phased six per cent in­crease in Na­tion­al In­sur­ance con­tri­bu­tions, three per cent in Jan­u­ary 2026 and an­oth­er three per cent in Jan­u­ary 2027, to pro­tect the fund and en­sure its sus­tain­abil­i­ty. He al­so re­vealed that the re­tire­ment age for re­ceiv­ing a full NIS pen­sion will grad­u­al­ly rise from 60 to 65 start­ing in Jan­u­ary 2028.

The last in­crease came in 2016, mov­ing from 12 per cent to 13.2 per cent of the em­ploy­ee’s month­ly salary.

While the Fi­nance Min­is­ter an­nounced a three-per­cent­age-point in­crease in con­tri­bu­tions in 2026 and a fur­ther three-per­cent­age-point in­crease in 2027, based on the fig­ures pro­vid­ed by the NIB, the ac­tu­al rise in em­ploy­ees’ pay­ment amounts to be­tween 22 per cent and 23 per cent in 2026. The fig­ures pro­vid­ed re­flect what the em­ploy­ee pays. Em­ploy­ers will be re­quired to pay dou­ble the con­tri­bu­tion of em­ploy­ees or two thirds of the over­all NIS pay­ment.

The changes mean that by 2027, us­ing the cur­rent min­i­mum wage rate of $20.50 an hour, em­ploy­ees work­ing a 40-hour week (about $3,500 a month) will pay an ad­di­tion­al $73.23 in NIS con­tri­bu­tions.

Based on the lat­est Cen­tral Sta­tis­ti­cal Of­fice (CSO) da­ta (2008-2009), an em­ploy­ee earn­ing the av­er­age gross month­ly house­hold in­come of $7,964 will see an in­crease of about $156.86, while those earn­ing $13,600 or more a month will con­tribute ap­prox­i­mate­ly $271.70 more by 2027. (Full de­tails are out­lined in the ac­com pa­ny­ing ta­bles.)

The NIB told Guardian Me­dia that it is pleased with these pro­posed changes as with­out them the fund would have been ex­haust­ed be­tween 2033 and 2034.

Ac­cord­ing to NIB ex­ec­u­tive di­rec­tor Niala Per­sad-Po­li­ah, “As of June 2024, based on our au­dit­ed fi­nan­cials, the NI Fund stood at $28.09 bil­lion, down from $30.78 bil­lion in June 2021. Be­hind these fig­ures lie a deep­er is­sue; ben­e­fits have ex­ceed­ed con­tri­bu­tions since 2013, and the sys­tem has been con­sis­tent­ly run­ning an­nu­al deficits since then, re­quir­ing with­drawals from in­vest­ment in­come to sus­tain ben­e­fit ex­pen­di­ture.”

The ex­ec­u­tive di­rec­tor said the pro­posed con­tri­bu­tion in­crease is pro­ject­ed to raise ap­prox­i­mate­ly $1 bil­lion in 2026 and a fur­ther $1 bil­lion in 2027.

“The pro­posed con­tri­bu­tion in­crease is pro­ject­ed to raise ap­prox­i­mate­ly $1 bil­lion in 2026. In 2027, ac­tu­ar­i­al es­ti­mates sug­gest that our con­tri­bu­tion in­come will in­crease by a fur­ther $1 bil­lion. This would re­duce the cur­rent cash flow deficit, de­lay the de­ple­tion of the Fund and give us more time to im­ple­ment strate­gies to en­sure the Fund is sus­tain­able for gen­er­a­tions to come. Our 12th Ac­tu­ar­i­al Re­view is cur­rent­ly un­der­way and we will give a more up­dat­ed as­sess­ment of the im­pact of these re­form mea­sures.”

With re­spect to the rais­ing of the re­tire­ment age, the NIBTT called it a “pru­dent and pro­gres­sive step.”

“To­day, peo­ple are liv­ing longer and health­i­er lives and this is syn­ony­mous with our age­ing pop­u­la­tion. In­creas­ing the re­tire­ment age for a full pen­sion to age 65 over a 10-year pe­ri­od, mov­ing one year every two years, gives con­trib­u­tors more flex­i­bil­i­ty, en­abling longer work­force par­tic­i­pa­tion and re­duc­ing the long-term pres­sure on the Fund. More­over, this aligns Trinidad and To­ba­go with glob­al trends, with sev­er­al coun­tries hav­ing al­ready shift­ed to age 65 or high­er for a full pen­sion. Im­por­tant­ly, per­sons can still choose to re­tire at 60 but with an ad­just­ed pen­sion.”

The move al­so re­ceived sup­port from the Trinidad and To­ba­go As­so­ci­a­tion of Re­tired Per­sons (TTARP), which said it will al­so com­bat age dis­crim­i­na­tion in hir­ing prac­tices.

Ac­cord­ing to Per­sad-Po­li­ah, “Over the years we have con­sis­tent­ly shared and lob­bied for the rec­om­men­da­tions as out­lined in suc­ces­sive ac­tu­ar­i­al re­views and ac­tive­ly sought the re­forms need­ed. We wel­come the op­por­tu­ni­ty to work with the new Min­is­ter of Fi­nance and GORTT and we are to­day pleased with the para­met­ric ad­just­ments that were both crit­i­cal and nec­es­sary to sup­port the sus­tain­abil­i­ty of the NI Sys­tem.”

The NIB ex­ec­u­tive di­rec­tor sought to re­mind the pub­lic that the NIS pro­vides far more than re­tire­ment pen­sions.

“We de­liv­er 23 ben­e­fits in to­tal, in­clud­ing ma­ter­ni­ty, sick­ness, in­jury, fu­ner­al grants, sur­vivors’ ben­e­fits and per­haps what we are most known for, re­tire­ment ben­e­fits. These re­forms are de­signed to en­sure that ben­e­fits re­main ac­ces­si­ble, rel­e­vant, and sus­tain­able.”