Q: Do you have the choice of staying with the old pension scheme?
A: The NIS is only reforming the parameters of the existing scheme, so there is only one scheme with no provision to opt out.
Q: Are other countries pursuing pension reform?
A: Several countries around the world have been undertaking pension reform. For example, the United States is planning to increase the retirement age and for 20 years now, the United Kingdom has been reforming its pension scheme.
Q: Was any research done before the options were prepared?
A: The actuarial reviews for the triennia ended 1996 and 1999 forecast certain problems in the future that required reform to be undertaken. An actuarial review is done every three years.
Q: Why can't the Government look at increasing the population to deal with the problems of pension?
A: Barbados is already one of the most densely populated countries in the world and increasing the population would just create other problems e.g. space to accommodate the additional persons. An increased population would also put a strain on social services.
Q: What is the objective of the Scheme in relation to pensions?
A: To provide a reasonable retirement income for all eligible contributors.
Q: How is pension currently calculated?
A: A person has to be working for at least 10 years. NIS takes 40 per cent of the average of the best three years, with earnings up to $715 per week. In addition, it takes one per cent of each year’s earnings after the first 500 contributions. The total pension is subject to a maximum of 60 per cent of the average of the best three years’ earnings and a minimum of $105 per week. Effective October 8, 2001, the minimum weekly contributory pension was increased from $98 to $105. All pensions were increased by 6.95 per cent up to a maximum of 60%.
Q: How is the National Insurance Fund managed?
A: The National Insurance Board is responsible for the management of the Fund. It is responsible for the collection of funds, the disbursement of benefits and the investment of surplus funds.
Q: What is the status of the NIS portfolio?
A: In 2000, 92.6% of the Fund’s assets were held in investments. The Fund’s investment portfolio grew by 10.1 % to $1.2 billion in 2000. Debentures made up 50% of the portfolio, followed by fixed deposits and Treasury notes at 14.8% and 12.19% respectively.
Q: How is the NIS Fund invested?
A: The National Insurance Board adopted an investment strategy which embraced the following principles:
2001 - 2002 Copyright National Insurance Scheme,