by Linda Straker
- 2024 NIS annual report tabled in Lower House of Parliament during 24 July session
- EC$174,657,447 in US Treasury Bills as of 31 December 2024 according report
- Public Finance and Management Act amended in April 2023
In 2024, the National Insurance Board (NIB) commenced the implementation of a new Strategic Asset Allocation framework that saw the board as part of this strategic goal, making a decision to allocate a greater portion of short-term investments to US Treasuries securities.
“This serves to enhance portfolio efficiency, optimise returns, and manage risks effectively. This strategic shift was driven by evolving market conditions and the need to align our investment portfolio with the Fund’s long-term sustainability objectives,” said the 2024 National Insurance Scheme (NIS) annual report, which was tabled in the Lower House of Parliament during the 24 July session.
“This move was designed to capitalise on attractive yields while maintaining liquidity and mitigating risk in a volatile market environment. Additionally, the organisation commenced the process of divesting from certain real estate properties that were generating little to no returns, thereby improving overall portfolio efficiency and redeploying capital into more productive assets.” The report was laid in the House by Leader of Government Business Philip Telesford.
NIB Chair Philbert Lewis said, “In line with its ongoing commitment to prudent financial stewardship, the board undertook a consolidation of its US and international equity investments, reducing the number of consultants from three to one,” he said under the subtopic Investment Strategy and Optimisation.
“After thorough analysis by the Management Team and in consultation with the World Bank’s Reserve Advisory and Management Partnership Team (RAMP), it was concluded that risk mitigation in this asset class is most effectively managed at the fund managerial level,” said the report.
“Consequently, all investments in this category were assigned to a single firm, Oppenheimer & Co. Inc. This move enabled the board to negotiate more favourable terms and achieve substantial savings in consultation fees,” Lewis said in the Chairman’s Report.
The amount in US Treasury Bills as of 31 December 2024, according to the report, is EC$174,657,447. The investment in US Treasury Bills was made possible after the Government amended the 2015 Public Finance and Management Act for statutory bodies and state-owned enterprises with excess funds to be allowed to invest in regional and international government securities.
United States Treasury securities, also called Treasuries or Treasurys, are government debt instruments issued by the United States Department of the Treasury to finance government spending as a supplement to taxation. Treasury securities are considered a safe and secure investment option because the US government guarantees that interest and principal payments will be paid on time.
The amendment was made in April 2023. During that parliamentary debate, Lennox Andrews, who is the Minister for Economic Development, told the House that the amendment would bring positive results to entities that will be affected because they will become more financially resilient. “For example, there is what is called the Regional Government Securities Exchange, which is operated from the Eastern Caribbean Central Bank, so if a statutory body now wants to invest, they can now invest in regional securities; the law doesn’t allow them to do so now, that is the beauty of this.”
“It allows them to go beyond the local boundary and invest regionally and internationally. So, for example, if the US Government is issuing treasury bills or bonds, they can buy it.” Andrews explained to the House that the amendment is allowing statutory bodies and state-owned enterprises a new option to make money to become financially strong and to ensure financial sustainability.
