Govt mulls bailout of cash-strapped NIS

Last Updated on Friday, 28 August 2015, 19:42 by GxMedia

The headquarters of the National Insurance Scheme

Finance Minister, Winston Jordan on Friday announced that government could soon be going into the Consolidated Fund to bail out the cash-strapped National Insurance Scheme (NIS).

Contributing to the debate on the amendment of the Income Tax Act, he said it would be a “real struggle” to find GUY$5 billion to put back into the social security scheme to which workers and employers contribute. “The consolidated fund may be asked to make good on that loss,” he said.

Jordan highlighted that NIS lost GUY$1.8 billion between 2009 and 2015 as a result of an investment of more than GUY$5.6 billion in the now collapsed CLICO (Bahamas).

Opposition Leader, Bharrat Jagdeo, in his contribution, said most of the monies have been recovered and insurance contributors reimbursed. “We believe that we are in the only country to redeem at face value all the deposits to contributors of CLICO,” said Jagdeo, a former Finance Minister.

Finance Minister Jordan said NIS also made a bad investment of almost GUY$1 billion in to Berbice River Bridge for which it has not begin receiving dividends.  

Jordan argued that the bad investments by the NIS have been eating into its capital to make even the minimal benefits available to contributors. He said the actuarial report would be examined and implemented. He said the approach would ensure that the NIS is never “asked to do anything as reckless as that.”

The Finance Minister noted that government was paying GUY$5 million monthly to occupy the leaking and unsafe building at Camp and Bent Streets, Georgetown . He said that building was very vulnerable to flooding and already several records have been damaged and destroyed. “It is not a pretty sight to see people sheltering during rain…” he said.