The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

A Cabinet Minister said the Government had yet to “bite the bullet” on National Insurance Board (NIB) reforms, adding that recommendations from the International Labour Organisation (ILOs) to raise contribution rates was “no breaking news”.     

Shane Gibson, minister of labour and national insurance, said NIB’s own actuarial reports have long warned that the current contribution rate of 8.8 per cent is not sufficient to sustain the current benefits promised indefinitely.

Mr Gibson told Tribune Business that this was”no breaking news”.

“Every single actuarial report from the inception of the fund until now, every one of them have said the exact same thing. This is no breaking news. Every report consistently said the same thing,” he said.

“It’s all about timing. I’m not sure when a decision will be made. From the inception of the fund until now, every actuarial review has said the exact same thing. The question is when do you bite the bullet and deal with it.”

The ILO warned that based on the  10th actuarial valuation of NIB, its reserves will be exhausted in 2029, without reforms to contribution rates, in particular for the pension branch.

These, it said, needed raisng immediately, with  a reduction in benefits the only way to avoid a rate increase.

According to the ILO, the 6.2 per cent contribution rate for pension benefits for instance, is insufficient to sustain that branch of the NIB fund beyond 2029 unless the rate is immediately raised.