Senior Investigative Reporter
shaliza.hassanali@guardian.co.tt
A messy situation. That’s how economist Prof Patrick Watson described the near bankruptcy of funds in the National Insurance Board of T&T (NIBTT) that led Finance Minister Dave Tancoo to increase the contribution rates by three per cent next January. In January 2027, the rates would also go up by another three per cent for the working class.
Weighing in on the increase on Thursday, Watson said the situation in NIB was “messy”, stating that he hopes this would serve as a wake-up call to the Government and NIBTT that this must never happen again.
“We must not reach the stage where you are about to go bankrupt. The only way to deal with this situation is to get more money from some source, and the best source is the current contributors.”
He said the increase was a forced saving for one’s retirement.
Data showed last year there were 488,256 insured contributors, with 19,341 employers.
Watson felt it was very unfortunate that the fund has been allowed to reach this sorry state. “So it’s not going to be a good thing for people who are employed at this point in time. The intention is good. It’s just that somebody has to pay for the mess into which the NIB has fallen. Something has to be done to deal with what is eventually going to be a bankrupt NIB. If they don’t intervene now, it’s trouble.”
He said it was not going to be an easy road for those who earn minimum wage and have to pay more contributions. Those people who have not received a salary increase in years would also be hard-hit.
“It’s a cost that has been added on to you. You are now paying an extra tax, according to what they have said.”
He said if the NIB should go belly up, it could lead to contributors rioting in the country.
“My own feeling is that the wrong people have been paying for the crisis.”
The NIBTT provides protection for insured people.
A pension is paid where the insured has a minimum of 750 contributions. The minimum pension payable is $3,000.
Delivering the 2026 Budget, Tancoo said that to save the NIBTT from bankruptcy and preserve the benefits for future generations, there must be an increase in contributions.
Tancoo also revealed that the retirement age for receiving a full NIS pension will gradually rise from 60 to 65 starting in January 2028.
People who retire early will still receive a pension, but at a reduced rate.
The last increase, in 2016, raised contributions from 12 per cent to 13.2 per cent of an employee’s monthly salary.
While Tancoo announced a three percentage point increase in contributions in 2026 and a further three percentage point increase in 2027, based on the figures provided by the NIB, the actual rise in employees’ payment amounts to between 22 per cent and 23 per cent in 2026.
The change means that by 2027, using the current minimum wage rate of $20.50 an hour, employees working a 40-hour week (about $3,500 a month) will pay an additional $73.23 in NIS contributions.
Increase expected to raise one billion
In response to questions from Guardian Media, NIB executive director Niala Persad-Poliah said the proposed contribution increase is expected to generate around $1 billion next year.
Actuarial estimates suggest that NIS contribution income will increase by a further $1B in 2027, thereby reducing the current cash flow deficit and also delaying the depletion of the fund.
Persad-Poliah described the Government’s move to increase the pension age as a prudent and progressive step.
“Over the years, we have consistently shared and lobbied for the recommendations as outlined in successive actuarial reviews and actively sought the reforms needed,” she said.
She said NIBTT considered the phased adjustments to the contribution rates to be reasonable.
Persad-Poliah said a worker in Class I would pay about $11.70 per month, while Class VII (seven) and Class XVI (16) workers would pay about $52.43 and $136.07, respectively, per month in 2026.
There are 16 classes of workers, with Class I being the lowest-paid and Class XVI the highest.
As of June 2024, the National Insurance Fund stood at $28.09 billion, down from $30.78 billion in June 2021.
The NIB 2023/2024 report stated that since 2013, benefits have been exceeding contributions.
In 2023, there were 223,281 benefit recipients compared to 226,618 in 2024.
The report also showed that 140,473 beneficiaries collected a retirement pension totalling $5.2 billion last year, while 6,864 individuals were paid retirement grants amounting to $405 million.
Worker struggling to survive
From the age of 20, Garvin Bascombe (not his real name) has been working and paying his NIS contributions. He served as a security guard, janitor, and Cepep labourer and moved up to a courier five years ago, which now earns him a monthly salary of $4,000.
During the 38 years he worked, Bascombe’s contributions have exceeded 1,000, which would entitle him to a monthly pension of $3,000.
As a 58-year-old bachelor, Bascombe said juggling his budget has been a task.
He puts aside $1,700 for rent.
It cost him $160 to travel to and from work.
His groceries and toiletries are $1,000.
Every month, he pays a health surcharge of $33.
An average of $500 is spent on electricity and internet.
Bascombe’s existing average monthly NIS contribution is $195.43.
With the three per cent NIS increase in January, he would now pay $240.07–a difference of $44.64 each month.
All Bascombe has left is less than $400—hardly enough to save for a rainy day.
“I can’t tell you the last day I put aside a little $20 in the bank. It ain’t have nothing like that.”
With the new tax being imposed on landlords, Bascombe said he would have to dig deeper in his pocket for rent next year.
“There has to be some cutting and contriving this round for me. If I doh do that, then crapaud smoke my pipe. The way I see it, I am just working to survive. I understand the money in the NIB is depleting, and it’s in jeopardy… so I have to pay the increase to collect my pension when I retire in 2027. It’s as simple as that. I don’t have a choice.”
For Bascombe, every cent counts.
He has already considered walking from his Laventille home to his Port-of-Spain job to save on travelling. To save on his electricity bill, Bascombe stopped turning on the night light in the porch.
“I have already told myself no more drinking a little two beers on a Friday evening to ease my stress, because that gone up too, from $10 to $13. I could save that $26. It’s pressure all around.”
Bascombe said he went through his grocery list to see what he could do without.
“I just buy the basic items, which are things I can’t cut back on.”