‘Think carefully before you proceed to invest’ ─ Minister Jordan

DPI, Guyana, Sunday, September 30, 2018

The NIS must be vigilant against those who seek to use its financial base as a means to enrich themselves at the expense of the agency’s financial stability. This warning was sounded by Finance Minister Winston Jordan, at the NIS’s 49th Anniversary General Assembly, on September 28 at its Brickdam Headquarters.

Minister Jordan recalled, “Everybody got off in the CLICO Scheme. This time, somebody will go to jail because we can’t continue to burden our taxpayers with these reckless decisions and these reckless investments.”

The Finance Minister explained that the NIS’s current allocation asset guideline and investment portfolio, comprising mainly government treasury bills and commercial bank deposits, will be reviewed. This, he said, is to bring the agency in line with some of the measures taken by regional counterparts, “The NIS is the oldest such scheme in the Caribbean. Everybody else followed after but they have progressed. I’m suggesting we have retrogressed…We have not made available some of the new products that have been explored by and implemented by our sister Caribbean institutions.”

Minister of Finance Winston Jordan at the National Insurance Scheme’s 49th Anniversary General Assembly.

Minister Jordan cited Trinidad’s NIS which invested in the housing market and realised significant returns. It would be feasible to establish a similar venture locally, the minister said. He reminded, “A number of schemes were used to build houses in areas where I live, like South Ruimveldt. Tucville, Festival City, Tucber Housing Scheme, Roxanne Burnham Gardens and a number of these housing schemes were built with different funds. Whether it be Co-op funds, credit union funds and in the context of safe investments, the NIS may wish to determine whether they could set aside a part of their allocation with a view to seeing investments [similarly].”

The expanding Oil and Gas Industry also has potential, Minister Jordan added. He advised, “For that, you need a very high powered and asset portfolio manager who understands risks. Who has been in the business a long time, and who, I’m not saying can guarantee your returns but with whom you can go to bed and sleep well at night…This is the big leagues and if we want to play with the big boys and girls, we have to know the game!”

General Manager Holly Greaves, giving her latest report, disclosed that the NIS collected $14.4Billion from January to August of this year and is projected to collect $8.3Billion for the remainder of 2018, amounting to a total of $22.7Billion. She added that the agency’s 2018 expenditure is estimated at $23.6Billion, showing a deficit of $854.9Million.

The general manager explained, “The primary contributing factor to the escalating total expenses was Benefits Payments of $14Billion which represented approximately 92% of the $15.5Billion in expenditure as at August 31, 2018,” Greaves said. She added that the pension branch accounted for $13.3Billion, while the short-term and industrial branches accounted for $1Billion and $160.9Million respectively.

As claims to the NIS, which stood at 82,934 at the end of August increase, she noted that the NIS is simultaneously faced with demographic, financial and economic challenges. There are 51,178 pensioners in the NIS’s database of which 37,285 receive old age pensions.

Paul Mc Adam.

Images: Akeem Peters.

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