While Vincentians lament the health of the National Insurance Services (NIS) and MPs grimace over the most recent actuarial study, a team from the World Bank’s Reserves Advice and Management Program (RAMP) is set to arrive here as early as next week.
RAMP is a capacity-building initiative supervised and managed by the Treasury of the World Bank. It aspires to develop the investment management capacities of public sector organizations so they can manage public assets efficiently, and to offer high-quality asset management services cost-effectively while preserving members’ interests.
Minister of Finance Camillo Gonsalves recently informed parliament that the RAMP team is slated to be here on a two-day assignment next Thursday.
“Accordingly, as the Minister of Finance, I received a letter dated February 14th 2023 from the World Bank regarding a mission to St Vincent and the Grenadines by the RAMP team of the World Bank treasury. This team will be on the ground in St Vincent and the Grenadines between March 16th to 17th of 2023 to conduct the technical advisory Mission related to the assumptions, findings, results and recommendations of the 11th valuation report,” Gonsalves said.
The NIS board had engaged Lifeworks Bahamas Limited, an independent Actuarial firm, to conduct the 11th actuarial evaluation of the National Insurance Fund as at December 31st, 2019.
Gonsalves said the valuation was conducted in fiscal year 2021 for the actuary to carefully consider the impact of the overlapping challenges of the pandemic and the eruption of the La Soufriere volcano on the sustainability of the fund. He said that after extensive deliberations between the board of the NIS and the actuary, the report of the actual review was submitted in August of 2021.
“This work product of Lifeworks was then interrogated by the Ministry of Finance, particularly in light of the stated resolve to engage in pension reform in this year.
“Based on the findings, results and significant recommendations in the report and previous advice from the external Auditors, the board engaged the services of the World Bank through the Reserve Advisory Management Partnership, called the RAMP, the reserve advisory and Management Partnership of the World Bank, to conduct an independent, peer review of this 11th actuarial valuation report.
“The independent peer review is not only in line with best practice, but it is prudent because the recommendations of the 11th report require the NIS to make several parametric changes to improve the financial sustainability of the National Insurance Fund.
“Also, the unprecedented economic volatilities in 2020, 2021 and 2022, together with the demographic challenges dictated that the assumptions and models used in the valuation be further reviewed and calibrated.
To this end, the RAMP team of the World Bank treasury was engaged to further assess the following:
One, the quality of data used in the 60-year projection period of 2019 to 2079.
Second, the appropriateness and applicability of the economic financial and demographic assumptions used in the report over that 60-year period.
Third, the consistency and reliability of the findings and results.
And finally, the robustness and future impact of the recommendations that are contained in the 11th report – because we wanted to project forward to make sure that the reforms that we are contemplating would have the desired effect on the sustainability of the fund,” the finance minister said.
Gonsalves said he expects, and he was informed, that receipt of the final report of the World Bank Mission would take place no later than 60 days after this Mission takes place.
“The cabinet would be guided by the submission of the Report of the World Bank Mission and the final report of the 11th, Actuarial valuation to make recommendations to this honourable house on parametric reform of the NIS.
“In addition, the government will lay a copy of the final Actuarial valuation report and the RAMP report of the World Bank before this honorable house.
The last actuarial report of the National Insurance Fund was conducted as of December 31st, 2019, and it covered a three-year period from 2017 to 2019. Also the same review covers the 60-year demographic and financial projections following the Caribbean Actuarial Associations Actuarial practice standards for Social Security Programs,” Gonsalves said.
