by Linda Straker
- Reserves grew by $25.6 million as at 31 December 2020
- Board’s Investment Income totalled $58.2 million
- $4.7 million was paid to 4,975 unemployed persons
Though the National Insurance Scheme (NIS) collection for 2020 was $20.6 million short of what was required to fund Benefit expenditure and fell well short of the rate from April to July, its reserve grew by $25.6 million.
“The Reserves grew by $25.6 million; from $962.8 million to $988.3 million as at December 31, 2020,” said Christopher Husbands in the Chairman’s report for the 2020 annual report which was recently tabled in the Lower House of Parliament.
“Benefit Expenditure totalled $106.2 million with Pension Expenditure of $86.9 million. Total expenditure amounted to $118.9 million. Payments were made to 11,637 pensioners monthly and to 15,072 other beneficiaries. Contribution Income increased from $85 million in 2019 to $85.6 million in 2020,” said the report which was tabled by Gregory Bowen Leader of Government Business in the House.
Husbands wrote that Administrative and Benefit expenditures exceeded contribution income by $30.6 million, consistent with the projections in the 11th and 12th Actuarial Reviews. The Board’s Investment Income totalled $58.2 million.
He further explained that administrative expenses totalled $9.95 million. “Administrative expenses as a percentage of contribution plus benefit grew from 4.9% in 2019 to 5.2% in 2020, which is well below the statutory limit of 12%.” The Chairman’s report explained that The Pay-As-You-Go (PAYG) rate as of 31 December 2020 was 14.1%. This was 3.1% above the stipulated 11% contribution rate.
In his report, Director Dorsett Cromwell said that during fiscal 2020, the National Insurance Board (NIB) paid $106,180,545 to beneficiaries while collecting only $85,575,730 — a gap of $20.6 million. “The 10.8% increase in benefit expenditure over 2019 was driven mainly by increases in Age Pension Expenditure and the implementation of the temporary Unemployment Assistance Benefit,” said the Director.
Pointing out that Grenada, like other countries globally, was faced with a high unemployment rate as a result of Covid-19, the Director said, “Our response to assist in maintaining the well-being of our citizens was the introduction of the Unemployment Assistance Benefit for the period May 2020 to January 2021. It is important to note that this benefit was not previously funded.”
“Payment commenced on May 27, 2020 and a total of $4.7 million was paid to 4,975 unemployed persons. During 2020, the NIB received 16,993 benefit claims, 18.2% less than the previous year,” said the NIS annual report.
The report said that more than $105 million was paid out in benefit to workers. “From the $106.2 million paid in benefits during the year, $88.8 million went to long-term benefits while$16.3 and $1.1 million were paid in short-term and employment injury benefits respectively. Benefit expenditure increased annually by 12.9% over the last 5 years,” the Director wrote in his overview. “This average annual increase was driven principally by an average annual increase of 12.3% in pension expenditure. During fiscal 2020, pension expenditure totalled $86.9 million, 81.8% of total benefit expenditure and an 8.3% increase relative to 2019,” he explained.
The report further explained that during Fiscal 2020, the NIS collected $85.6 million in contribution income with the Government of Grenada contributing $25.9 million on behalf of its employees. The $85.6 million in contribution income was $20.6 million short of what was required to fund benefit expenditure and fell well short of the rate from April to July.