NIB not in crisis anymore, says director | Business

The National Insurance Board’s (NIB) performance is much better than predicted due to a change in its operations model and further cost-cutting measures, according to Dr. Tami Francis, director of the NIB.

During a press conference at the board’s Baillou Hill Road offices yesterday, Francis said the perilous state NIB found itself in – under threat of becoming insolvent and collapsing – while not fully behind it, is being staved off.

Francis said: “At the moment our performance is actually much better than predicted. While we may still have a slight difference in our contribution income versus our benefit expenditure, what we would have expected or predicted, we are doing a lot better than expected.

“Now, that does not mean we are to rest on our laurels. An increase of this nature would not be something that will ultimately save the fund, and as I said earlier, we’ll have to work along with other measures as we work towards reform, so this is not the overall savior of the fund.”

The NIB implemented a 1.5 percent rate increase in July, 2024. The adjustment was introduced to ensure the long-term financial sustainability of the fund following warnings from consecutive actuarial reviews that the fund’s reserves could face depletion.

In tandem with the percentage rate increase, the NIB adjusted the insurable wage ceiling to $810 per week (up from $740) effective July 2024. This change occurs biennially to keep up with inflation and allows workers to protect a higher portion of their income for future benefit and pension calculations.

Francis claimed that that July 2024 rate increase increased NIB’s income by an additional $4 million a month, but this alone did not help set the fund back on a path to financial stability.

“We are also looking at cost-saving measures. In 2018 we would have been somewhere around 21 percent of admin expenses. Today, our administrative expenses have decreased, and we are now at 15 percent.

“For a social security institution, utopia is around 10 percent. I can’t tell you of any social security institution off the top of my head, especially in the region, that may be around 10 percent.

“So we have really reduced several things there. There are several measures working together that have helped our performance over time now. The fund, right now, we’re not in crisis, but as I said earlier, that doesn’t mean we should rest on our laurels.”