Guyana’s social security system, the National Insurance Scheme (NIS) , is set to receive a GYD$5.6 billion cash injection over the next 20 years to compensate for a loss of money in the failed Colonial Life Insurance Company (CLICO).
He said Cabinet has approved the government repaying NIS through non-negotiable Guyana government debenture certificates over a 20 year period at a fixed interest rate of 1.5 percent on the principal sum of GYD$4,882,446,199 dollars.
Payments will begin in January, 2017 and by the year 2037, calculations show that the NIS will receive a total of GYD$5,651,431,475.34. “It is the best that the government can do at the moment but it is substantially more than what NIS would have had if this investment continues to be impaired,” the Finance Minister said.
Jordan explained that the decision was made in keeping with a then opposition-sponsored Parliamentary Resolution for NIS to get back the money. He said without that money, the social security agency was finding it hard to assist beneficiaries.
“NIS investments in CLICO is impaired with extreme unlikelihood of getting back that money. As a result of that impairment, NIS as you know, has been suffering terribly and not only NIS but the beneficiaries in NIS are suffering terribly because their ability to raise benefits will obviously be constrained by the fact that they don’t have this money and this money cannot be put to earn additional monies for them,” he said.
NIS had invested an estimated GYD$6B or more than 20 percent of its assets in CLICO (Guyana) because government at the time had found it a lucrative deal. That money had been subsequently reinvested by CLICO (Guyana) in CLICO (Bahamas) which tied up the funds in real investments in Florida. CLICO (Bahamas) collapsed under pressure from the mortgage crisis in that part of the United States, taking with it the NIS investment.