The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The National Insurance Board’s (NIB) director says the surge in COVID-19 related benefits claims has not caused “a major shift” in how the social security system manages its $1.7bn reserve fund.

Dr Nicola Virgil-Rolle, pictured, said the social security system’s very “conservative” investment portfolio meant it was able to access deposits and liquid cash when needed as it braces to pay out $16m a month “above what it normally budgets” in benefits payments

“We have always had a very conservative investment portfolio,” she said. “That is the nature of the social security business. We have a fund of $1.7bn, of which by the far majority of it is in very conservative assets including Bahamas Government Registered Stock (BGRS).

“We have deposits in local bank accounts that we have access to, so those are very near cash assets. A very small portion of our portfolio is in real estate, and then we have a few hundred million in foreign currency assets.”

Dr Virgil-Rolle added: “So we just had to ensure, through good treasury management, that we have our deposits on hand as they come due. As we need them, we redeem them, and I wouldn’t say it’s a major shift in managing this because we’ve had a conservative portfolio.”

Brensil Rolle, minister of the public service and national insurance, previously told the House of Assembly that NIB had just days to process three times’ the number of benefits claims it receives in a typical year due to the COVID-19 crisis.

The extra payouts he identified translate into an extra $192m annually which, depending on the pandemic’s economic impact and how long it lasts, will further strain a $1.7bn NIB reserve fund which was already set to come under ever-increasing pressure.

While no audited financial statements for NIB have been released since 2016, Mr Rolle confirmed that benefits payouts have exceeded contributions ever since that year. And previous actuarial reports have warned that the $1.7bn reserve fund could be exhausted by early next decade unless major reforms are swiftly implemented.

The minister alluded to this, referring to NIB’s five-year “strategic plan” and the fact that the COVID-19 crisis had made implementing several of the reforms it contains almost imperative to secure the social security system’s future sustainability.

For now, though, NIB is doing exactly what it was created for - providing income support and a social safety net to thousands of Bahamians and their families who have either suffered job losses or reduced incomes as a result of the pandemic’s fall-out.