By EARYEL BOWLEG
Tribune Staff Reporter
ebowleg@tribunemedia.net
MYLES Laroda said the government is considering increasing National Insurance Board’s contribution rate every two years for “a period of time” to stabilise the fund, noting next year’s rate increase will be shared equally between employees and employers.
He did not say what the contribution rate will increase to. However, he discussed what would happen if the rate increased by 1.5 per cent.
“If the rate is 1.5 per cent, the employer’s portion rises from 5.9 per cent to 6.65 per cent, and the employee’s portion rises from 3.9 per cent to 4.65 per cent,” said Mr Laroda, the state minister responsible for NIB in the Office of the Prime Minister. He spoke during his contribution to the Budget debate in the House of Assembly last night.
“In the first year, paying the minimum weekly range of $260 will increase the employer’s portion from $15.34 to $17.29. Employer’s contributions on the minimum weekly wage will increase $10.14 to $12.09. For both the employer and the employee, this represents a difference of $1.95 per week.
“For those salaries on the minimum wage of $1,127.67, employers and employees will pay a difference of $8.45 per month. This is less than the cost of a meal at any one of our local restaurants. This is a small price to pay to secure our pensions for the future.”
“Employers’ weekly payment on the ceiling of $740 per week will increase from $43.66 to $49.21. Employees’ contribution payments on the ceiling of $740 per week will increase from $28.86 to $34.41. For both the employer and employee, this represents a difference of $5.55 per week. For monthly salary on the ceiling of $3,207, employers and employees will pay a difference of $24.05.”
Mr Laroda noted that, according to the latest actuarial report, the NIB fund could be depleted by 2028.
The actuarial report considered the lowering fertility rate, women having fewer children, and the growing life expectancy.
“Today, we have approximately four contributors for each pensioner. By 2078, it is projected that we will have 1.4 contributors for each pensioner, a sharp decline,” he said.
“Over the last ten years, the average number of pensioners being paid every month has increased by over 35 per cent. This is driving the increase in benefit expenses, coupled with the fact that each year the average benefit for recipient increases as first-time pensioners are being paid higher benefits than in the prior years.”
Mr Laroda noted NIB is projected to lose $97m this year.
Comments
moncurcool 1 year, 6 months ago
How is it in all the NIB talk, that government no where takes responsibility for its reckless use in spending NIB funds?
bcitizen 1 year, 6 months ago
Just put NIB to 110% one time and get it over with. Then NIB can hire everyone in the country to work there. It would be a wonderful solution to the problem.
The_Oracle 1 year, 6 months ago
Small price to pay? easy to say when all you have to do is "take $$" from the whole working population. Anyway, we all knew since its inception it wouldn't be long before it would be broke. Grubby greedy Government hands can't leave anything alone. Fixing problems that don't exist, ignoring real issues. If Government ran a liquor store it would have to be subsidized like BPL/Bahamasair.
Sickened 1 year, 6 months ago
Will NIB promise to stop investing in corrupt and ill advised government and quasi government companies and industries? THAT is why NIB is going bankrupt. Also, if the government wasn't so greedy and corrupt then the middle class would still exist here today and would be contributing to NIB. Instead the vast majority of the middle class either left the country, and are happily contributing elsewhere (and getting value in return for their taxes I might add) or have been downgraded to 'poor' or are out of work. Corruption continues to destroy this country.
TalRussell 1 year, 6 months ago
I really wanna believe that the Greeks did have Colony's Crown Minster Myles Laroda in mind, when they said, — "Honourable Comrade, know and stick to thy true self." – 'Aye.' 'Nay?
ExposedU2C 1 year, 6 months ago
Death by a thousand cuts will not help this bankrupt Ponzi scheme. IMF have suggested all NIB benefit payments and obligations be phased out as quickly as possible and that NIB be transformed at the earliest possible time to an income tax regime with a minimum tax rate of 15%.
Dawes 1 year, 6 months ago
call it what it is, an income tax
TalRussell 1 year, 6 months ago
Here now listening in such astonishment to the out of control tone of the political rants – Carried-out against the government and USA's under construction Bahamian Embassy – By the Guardian's Talk Radio's on-air 12 PM hour Announcer and two Live in studio guests. — In my humble view, does calls for serious consideration as to proceeding with – Immediate suspension of the stations government issued broadcasting license. – 'Aye.' 'Nay?'
SP 1 year, 6 months ago
I hope these geniuses don't forget to factor in wage increases to keep pace with a simi-annual increase in NIB taxes!
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