by Linda Straker
- Reserves surpassed EC$1 billion for first time in 2021
- First-time contributions increased by 8.8% relative to 2020
- Private sector employers totalled $66.8 million; Government $29.3 million
The National Insurance Scheme (NIS) recorded an increase of EC$10.5 million in contributions compared to the EC$85.6 million received in 2020. Its reserves surpassed EC$1 billion for the first time in 2021, but that is a decline in projected reserve growth.
According to the 2021 annual report which is set to be laid in the Lower House of Parliament at its 29 September 2022 sitting, the financial performance of the National Insurance Board (NIB) among other things, continues to see increased expenditure and reduced income.
“The Reserves grew by $25.9 million to $1.01 billion as of 31 December 2021,” said the report which explained that the NIB’s Reserve grew by 2.6% in 2021 crossing the billion-dollar mark. However, Dorset Cromwell who is the Director of the NIS explained in his report this figure can improve if the recommendations from 2 previous actuaries are implemented.
“The Reserve at the end of 2021 stood at $1.01 billion compared to $988.3 million in the previous year. Over the last 5 years, the Reserves had an average annual growth of 2.1%, accumulating at a much slower rate than previous years,”.
“As projected in the 11th and 12th Actuarial Reviews, this decline in reserve growth will persist if actuarial recommendations are not implemented.” Cromwell’s report forms part of the complete annual report which said that benefit expenditure totaled $116.5 million with pension expenditure of $97.8 million.
Total expenditure for the NIB amounted to $ 127.1 million while payments were made to 12,099 pensioners monthly and to 11,843 other beneficiaries. Contribution income increased from $85.6 million in 2020 to $96.1 million in 2021.
“As projected in the 12th Actuarial Review, the total expenditure would continue to be higher than contribution income. The Board’s Investment Income totalled $56.4 million. Administrative expenditure totalled $9.4 million for the 2021 financial year,” said Christopher Husbands, who was serving as the Chairman of the NIB. “This expense as a percentage of contribution plus benefits decreased from 5.2% in 2020 to 4.4% in 2021 which is still well below the statutory limit of 12%.” His report is also included in the complete report of the Board.
Contribution income for the 2021 financial year totaled $96.1 million and this is a 12.3% increase in relation to contribution income in 2020. “Collections from private sector employers totalled $66.8 million and Government, $29.3 million. Annual growth in contribution income averaged 6.6% over the last five years,” the report explained.
For 2021 there were 6,096 active employers in 2021 and 6,126 during 2020 which is a marginal 0.5% decrease. Of the 6,096 active employers, 1,184 were self-employed; this is 9.9% less than 2020. Total active contributors for 2021 stood at 48,700 representing a 1.8% decline relative to 2020. In 2021, the report noted 2,582 individuals contributed to the NIS for the first time. That number has increased by 8.8% relative to 2020.