Renu­ka Singh

Con­cerns and ques­tions are be­ing raised about the Na­tion­al In­sur­ance Board’s (NIB) bil­lion-dol­lar in­vest­ment in the Na­tion­al In­vest­ment Fund (NIF).

The main con­cern seems to stem from the NIB’s ad­mis­sion dur­ing a Joint Se­lect Com­mit­tee (JSC) hear­ing last year that the NIB fund could go bank­rupt in 12 years if sig­nif­i­cant changes are not im­ple­ment­ed.

De­spite that dim out­look, the NIB was able to in­vest $1 bil­lion dol­lars in the NIF, be­com­ing the sin­gle largest in­vestor in the fund.

The NIB de­fend­ed its in­vest­ment choice in re­sponse to ques­tions from the Sun­day Guardian at the end of Au­gust.

The NIB said while it rec­om­mend­ed con­tri­bu­tion in­creas­es in the last ac­tu­ar­i­al re­view, it has noth­ing to do with this in­vest­ment.

The NIB said it was lob­by­ing for a freeze to keep pen­sion at $3,000 and in­creas­ing the re­tire­ment age to 65. The NIB is al­so lob­by­ing for an in­crease in con­tri­bu­tions to 15.6 per cent in or­der to rec­ti­fy its cur­rent fi­nan­cial straits.

These changes, the NIB said, did not im­pact its abil­i­ty to make such a mas­sive in­vest­ment in the un­guar­an­teed NIF.

“The in­vest­ment de­ci­sion-mak­ing process in­volves a very high lev­el of pru­dence, keep­ing in mind the ob­jec­tive of long-term sus­tain­abil­i­ty of the fund,” the NIB said in re­sponse to ques­tions.

“The NIB has sub­mit­ted its ap­pli­ca­tion for the bonds and we are cur­rent­ly await­ing con­fir­ma­tion of al­lo­ca­tion on the said bonds,” the NIB said.

The Sun­day Guardian emailed the NIB on Sep­tem­ber 4 for an up­date on its al­lo­ca­tion, but there was no re­sponse.

“The de­ci­sion-mak­ing process per­tain­ing to in­vest­ments is guid­ed first­ly by the statu­to­ry lim­its con­tained in the First Sched­ule of the Na­tion­al In­sur­ance Act that reg­u­late the in­vest­ment of the NIB’s in­vest­ment port­fo­lio,” the NIB said.

“How­ev­er, apart from these statu­to­ry lim­its, the de­ci­sion-mak­ing process is fur­ther guid­ed by the In­vest­ment Pol­i­cy which es­tab­lish­es self-im­posed lim­its/goals that re­flect re­turn/risk pa­ra­me­ters con­sis­tent with the re­quire­ment to sat­is­fy the long-term pen­sion li­a­bil­i­ties of the Na­tion­al In­sur­ance Sys­tem. The In­vest­ment Pol­i­cy has been de­vel­oped with ref­er­ence to the First Sched­ule of the Na­tion­al In­sur­ance Act.”

The NIB said all in­vest­ments are sub­ject­ed to re­view by the In­vest­ment Com­mit­tee, then the board of di­rec­tors if the in­vest­ment ex­ceeds pre­scribed thresh­olds.

The NIB was asked about its oth­er in­vest­ments but would on­ly pro­vide its port­fo­lio for 2016. That in­vest­ment port­fo­lio stood at $24.3 bil­lion

Last month, Fi­nance Min­is­ter Colm Im­bert was forced to de­fend his brain­child against crit­i­cism from the Op­po­si­tion and list­ed the in­vestors as $828 mil­lion from pen­sion funds, $251 mil­lion from cred­it unions, $1.2 bil­lion from mu­tu­al funds, $2.1 bil­lion from in­sur­ance com­pa­nies and $1.1 bil­lion con­tributed through “oth­er” means. The NIB, he con­firmed then, in­vest­ed $1 bil­lion.

The NIF is the largest pub­lic place­ment of bonds on record, yet it was done with­out a gov­ern­ment guar­an­tee. The T&T Se­cu­ri­ties and Ex­change (TTSEC) said it ap­proved the NIF be­fore it was pub­licly list­ed last Tues­day but did not re­spond to oth­er ques­tions about whether the TTSEC man­date was car­ried out as it re­lates to the NIF.

The TTSEC al­so did not re­spond to ques­tions about when in­vestors would learn of their in­di­vid­ual al­lo­ca­tion al­though the dead­line date for no­ti­fi­ca­tion passed on Au­gust 30.

The Sun­day Guardian emailed and texted Im­bert on Sep­tem­ber 6 and asked about the NIF al­lo­ca­tion for the NIB. He was al­so asked whether he gave any di­rec­tion to the NIB to cause the bil­lion-dol­lar in­vest­ment. There was no re­sponse.