On Monday, August 29, Prime Minister Ralph Gonsalves endeavored to elucidate to the citizens of St. Vincent and the Grenadines that the National Insurance Scheme (NIS), serving as the nation’s Social Security System, continues to be the most advantageous investment for individuals engaged in gainful employment.
The National Insurance System (NIS) has been subject to critical examination subsequent to the release of the most recent actuarial assessment, which has recommended the implementation of reforms by the year 2034.
“What are the unvarnished facts about the NIS? And I want the working people to hear me. Today, tomorrow, and with the reforms that are going to be instituted, the NIS is, remains, and will continue to be by far the best investment that any working person can make with their money”.
“All what you put in, at the lower level of the income scale. You get back between 18 months and two years, and at the higher level, you get back between 3 and 4 years more than all the money that you put in, and after that, what you get is Brawta, Brawta, and from employers and investment monies”.
Gonsalves stated that he is unlikely to be around in the year 2034. However, as a conscientious leader, he recognizes the imperative nature of making difficult choices in the present.
“When you look ahead, the current structure for the NIS will be in difficulties then. I could sit back and say, Well, it’s not my problem, but I’m a responsible person. I have to look ahead. So that the reforms that will have to be made then will not be reforms that will hurt you”.
According to Gonsalves, the National Insurance Scheme (NIS) has been effectively governed by competent political and administrative leadership.
“Another truth is that the NIS, under this political leadership and under the leadership of Stewart Haynes and Reginald Thomas, has been a well-run organization. You’re not going to have a perfect organization, but a well-run organization”, Gonsalves said.
In July, Finance Minister Camilo Gonsalves said reform of St. Vincent’s Social Security System (NIS) is an urgent and unavoidable imperative.
Gonsalves said back then that the unvarnished analysis established a gradual contribution rate increase from 10% to 15% over a 10-year period (2023–2033).
Gonsalves said that, as such, these potential reforms are explicitly on the table for discussion, debate, and decision.
“So too are reforms of the public pension system to enhance harmonization with the NIS arrangements, including consideration of measures to introduce a mandatory contribution rate for employees; align the retirement age of civil servants with the NIS’ pensionable age; and limit the maximum replacement rate from 127% to about 85% by considering a top-up on the NIS’ pensions. For instance, if the NIS pays 60%, the government would top up pensions to 80% for retirees under PSPS. This is in line with best practice and is similar to the designs of existing private sector pension plans operating in Saint Vincent and the Grenadines”.
He said back then that these measures would apply to new entrants into the civil service and could significantly enhance the long-term sustainability of the public pension system.
The National Insurance Service is almost 40 years old, dating back to the mid-1980s. Its predecessor, the National Provident Fund, dates back 53 years, to 1970.
