As a former executive at the National Insurance Board (NIB), yeah the head of Risk Management, I am perplexed by stories mentioning “idle funds” at the NIB and the alleged commandeering of these idle funds to be used for other purposes.

Firstly, there are no “idle funds” at the NIB, idle people, well that is a different story. Like any other insurance company, the NIB collects premiums and invests those premiums to pay benefit expenditure at a future date. However, unlike other insurance companies who are allowed to set their premiums based on actuarial assumptions and thus any surplus of income over claims and reserves for future claims are the property of the company, the NIB is reliant on the Government to allow contribution rate increases while still having to pay a minimum $3,000 pension.

Add to that the fact that not all the companies that should be paying NIS for their employees do so, as well as some deduct the contributions and do not remit the funds to the NIB and you begin to get a picture of the situation. For years people feel they “out smarting” the system when all they’re doing is stealing money out of their 60 year old future self brassiere.

Little known fact, once you can prove that contributions were deducted from your salary, the NIB is legally required to honor your claims, whether they received the funds or not. Yeah NIB does get bent over from all sides without grease.

There is a simple formula to understand how the NIB honors their obligations.

Contribution Income + Investment Income – Benefit Expenditure = Surplus.

For years benefit expenditure has exceeded contribution income by a lot. NIB has been using investment income to help fund the difference. The current low interest rate environment doesn’t help them make money either.

In fact, given an aging population, declines in the ratio of contributors to beneficiaries, at one point the NIB was forecasted to have to start to selling assets just to pay benefits when due and to run out of assets by 2035-2036. The state of the NIS is actually the result of politicians adjusting the minimum pension based on nothing more than a need for votes. Yeah, “check allyuh self before allyuh wreck allyuh self”.

Now, this does not mean the NIB is bankrupt. They still have twenty-something billion in income earning assets and can still tweak contribution rates and other variables to put off this situation. However, what they do not have is idle funds. Them funds working in a sweat shop trying hard to squeeze two 5 cents out of a 10 cent.

So, I don’t care about the other madness being spewed about the place but don’t drag an institution that is key to the entire country regardless of people’s affiliation down into the gutter politics.

Please and thanks.

TANA

PS: If you want more information on how the NIS system actually works you can read this post https://tanaslog.com/tana-nomics/tana-nomics/

This Post Has 32 Comments

  1. Anonymous

    Very informative. Thanks for the enlightenment.

    1. Anonymous

      Well written!!
      It’s about time someone with cojones said something to shed truth on the matter and give proper insight.

    2. Anonymous

      Good information. Well written. Thank you. I was wondering when someone would write about the recklessness of that approach to financing projects.

  2. Carl Rajack

    You mentioned employers deducting NIB contributions from their employees but not remitting these funds to the NIB.

    I always wondered why the NIB did not allow members on-line access to their individual accounts so they can monitor their accounts and check their contributions at any time.

    This would certainly reduce the amount of fraud committed by unscrupulous employers.

    1. Anonymous

      You do have access
      It’s called a contribution statement
      You can request one

      1. Anonymous

        An excellent solution. you move to the head of the class. Thanks for your contribution.

    2. Anonymous

      You’re onto something there.

      One must always be in a position to follow up on their personal affairs in short order.

    3. Anonymous

      Well very good to know then maybe you can help by paying benefits on time because some people waiting on their payments and is to long and survival is hard a unfit person who has to see doctor and pay bills and put food on the table can’t wait a year and more please do something

      1. Tana's Log

        I think you need to direct these concerns to the NIB. I no longer work there.

  3. Anonymous

    I think everyone (from the age of 18yrs) should be allowed to contribute. Then you should be entitled to the benifits.

    1. Anonymous

      You can from the age of 16 once you are employed and earn more than 180 per week
      Visit the nib website

  4. Debbie Ann Joned

    Thanks for the info. Much appreciated and I hope the voting public reads and understands this and the implication thereof. I want no one interfering with my pension contribution that was taken from my salary for the last 41 years. Govt any Govt must never touch it!

  5. Joan

    You sure you were head of a department? Writing like this? Wow!

    1. Tana's Log

      Clearly you came to the wrong page Joan. I am quite sure and have no need to impress anyone. Thanks for stopping by. Good day.

      1. Anonymous

        Love the response… Well said

  6. Anonymous

    Thank you for the info, however I proved to the NIB
    that my employer paid my benefits and I am waiting three years for an answer

    1. Tana's Log

      Yeah, I’m not saying there aren’t operational issues like in any other company. There are lots of things they need to do better. I have my issues with them as well.

  7. Anonymous

    Excellent post, just the facts in a nutshell. The NIB’s enabling legislation allows it to independently fulfill it’s mandate. The problem is some people view contributing as a tax and not insurance premiums, including politicians who increase minimum pensions with no consideration of the funding side.

  8. Anonymous

    Thanks for this information.
    How long does it take to get a contribution statement? I applied online two weeks ago…. nothing yet …

  9. Anonymous

    I think the govt should deduct NIS from Service Providers who are paid by the govt. These people are at a disadvantage because they want to contribute but cannot do so over the counter.

  10. Curtis

    I am 57 years old and on two occasions I requested my conurbation statement online and in both instances the contributions they had recorded was less than what was contributed by my employers. I am in possession of all my salary slips from when I first started working to present and on both occasions I went to the NIB office with originals and copies and presented it to them, months after I requested and update statement and nothing changed.

  11. Anonymous

    When ever was the minimum pension adjusted?

    1. Tana's Log

      In the financial year 2004 the minimum pension of TT$1,000 was introduced. From
      January 2008, this minimum pension increased by 100 per cent to $2,000 per month and was further increased by 50 per cent to its current level of $3,000 in the 2012 financial year.

  12. Adrian

    Is the writer suggesting that although the NIB has assets to liquidate, which can pay benefits for another 15 or so years, that there are no cash balances that can be invested in a fund to earn profits?

    Further, is the writer suggesting that if a government increases the minimum pension that is a bad thing? Have the NIB approached said government to provide lump sum relief actuarially calculated to represent these increases?

    I see the writer indicates that minimum was 1000 in 2004, 2000 in 2008 and 3000 in 2012. So every 4 years they increased the minimum pension by 1000 but either the NIB didn’t ask for lump sum relief from the government OR the investment decisions of the NIB has failed miserably in recent years.

    1. Tana's Log

      Regarding the assets the writer is suggesting no such thing. Liquidation of assets is a last resort when all other actuarial and funding options are exhausted. If you read any of the actuarial valuations you would understand. Whether the NIB approached the government for funding or not is a matter best addressed to the NIB. It is not my place to disclose any information not in the public domain. Your final point is utter rubbish because the minimum benefit was increased with no regard for the earned benefit. The gap between earned benefit and the minimum currently has to be funded by the NIB. I suggest you go do some reading and then return when you have the knowledge of the system to make a meaningful contribution.

  13. Gemma

    Hi. All my contributions was made to NIB for 16 yrs. About 3 yrs ago I went to Check on my contributions only to really a bunch of them were missing.
    I.had to go back to my old employer to get proof that the contributions were made… after digging into old files (since it had been 12 yrs since I had last work there) they found proof of my contributions, it was taken to NIB Tunapuna branch, since my office was 2 minutes walk from the office, my ex boss took the info in person, but NIB never updated the files. At about to turn 60 yrs in a couple months and my contribution is still showing short of 69. They never updated with the new info that was provided. My old company has since closed down and all files shredded. How can I prove that my contribution of 16 yrs was made?
    3 in called to find out if it was updated they keep saying not it will be. But it was never done, and they cannot find the info that my ex boss provided for them. Pls advise.
    I need to get at lease the 69 to be able to get my pension.
    How else can I prove it was paid to NIB
    Thanks

    1. Tana's Log

      The only advice I can provide is to visit the NIB offices again. There are documents they accept as alternative proof.

  14. Gemma

    Hi. All my contributions was made to NIB for 16 yrs. About 3 yrs ago I went to Check on my contributions only to realize a bunch of them were missing.
    I.had to go back to my old employer to get proof that the contributions were made… after digging into old files (since it had been 12 yrs since I had last work there) they found proof of my contributions, it was taken to NIB Tunapuna branch, since my office was 2 minutes walk from the office, my ex boss took the info in person, but NIB never updated the files. I am about to turn 60 yrs in a couple months and my contribution is still showing short of 69. They never updated with the new info that was provided. My old company has since closed down and all files shredded. How can I prove that my contribution of 16 yrs was made?
    3 times called to find out if it was updated they keep saying not yet but it will be. But it was never done, and they cannot find the info that my ex boss provided for them. Pls advise.
    I need to get at lease the 69 to be able to get my pension.
    How else can I prove it was paid to NIB
    Thanks

  15. Gemma

    Thanks. I was there in February of this year but they just said 69 contributions still missing, but offered no info on what other documents I could offer as proof
    I wish they had just told me my other options.

    Thanks for you help.

  16. Anonymous

    What about the 178 members of staff they sent home because they didnt make a full year. What are they doing about that?

    1. Tana's Log

      You did notice I started by saying I’m a FORMER executive there right. You need to direct them questions current NIB management.

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