Arbitral award will affect NIS payments -- says Martinborough by Wendella Davidson Guyana Chronicle October 23, 1999 GENERAL Manager of the National Insurance Scheme (NIS), Mr Patrick Martinborough, has predicted a gloomy future for the Scheme as a result of the acceptance by Government of the recent Arbitral Award for public sector workers. He said for each of the remaining months of this year - October, November and December - the Scheme is expected to pay pension increases totalling $36.75M. And, with insurable income ceilings (IIC) of $76,000 and $17,538 respectively for monthly and weekly employees for the year 2000, the Scheme anticipates pension increases will soar to $43.04M. Also, an expected collection of contributions totalling $118.80M as against its expenditure of $516.48M for the year 2000, has given cause for serious concern within the Scheme. Martinborough made the observations yesterday at a press briefing held at the GTV 11 Studio, Homestretch Avenue. The purpose of the briefing was to sensitise the public about the Scheme's financial position. It was also to alert the nation to the possibility, that in the circumstances, a necessary course of action may have to be adopted. Martinborough further explained that the parameters of NIS are all tied to the minimum wage. The NIS boss was accompanied by the organisation's senior personnel Mr Maurice Solomon, Director and Employer's representative; Mr Paul Chung, Director/Chairman, Investment Committee; and Ms Debra Carter, Public Relations Officer (PRO). According to the General Manager, as a result of the recent increase in the minimum wage to $15,000 monthly, the NIS has had to increase its insurable income ceilings from $46,000 to $60,0000 effective September 1, last for monthly employees, and from $10,615 to $13,846 effective September 11 for those paid weekly. In addition, the maximum payment for overseas medical care is $600,000, or 80 per cent, which ever is less, while the minimum pension for pensioners in receipt of old age and invalidity benefits now stands at $7,500 from a previous $5,723. Noting that the NIS has some $12 Billion in reserves Martinborough pointed out that the insurable income ceiling plays an important part in the benefits of NIS. The current IIC of $60,000 represents a multiple of the minimum wage in the public service and the maximum amount insured for NIS purposes. Also, the minimum pension is fixed at 50 per cent of minimum wage, while all benefits are fixed at percentages in relation to the earnings of the respective employees and are subject to a percentage of the IIC. An employee's contribution is a fixed 12 per cent of the insurable earnings, and is shared between the employee and his employer, the NIS General Manager pointed out. A release provided by the organisaiton noted that there is a fear that should the overall contribution rate remain as it is, the long term benefits reserve will be in jeopardy. That document showed a recommended increase in the overall contribution rate of 14 per cent in 1997; 15 per cent in 1998 and 16 per cent for the 1999 and 2003. It is estimated that with such an overall contribution rate, the reserve would start to decline in the year 2005 and be exhausted by year 2008. However, discussions are ongoing on the way forward and Martinborough said a decision will be taken shortly. Meanwhile, the Scheme has some $100M in outstanding debts, and according to Martinborough, a number of the defaulters are facing legal action. He said that in some cases where judgement has been granted in favour of the NIS, the Scheme has been experiencing difficulty in recouping the monies owed. Responding to a query about apparent delays in the payment of some claims, PRO Carter said the situation can be attributed to only a few cases and is caused mainly by either queries on the respective claims or wrong documentation on the part of the claimants or their employers. She said in addition to on-going radio and television programmes as well as seminars mounted by the NIS, the Public Relations Unit also circulates numerous brochures about the organisation. A © page from: Guyana: Land of Six Peoples