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  • Are there any other options other than having to increase the Contribution Rates?
    There were several options recommended by the International Labour Organization to help bring stability to the Fund which include: modification of the pension accrual rate increasing the retirement age from 65 to 67 seeking governmental grants to cover NIB Assistance the conditional indexation of biennial increases
  • Is NIB overstaffed? If so, will something be done about it?
    No. NIB is not overstaffed. Recruitment and new hires are geared towards meeting operational needs. Special attention has been given to ensuring that our Claims Department is well supported so that our clients’ claims are addressed in a timely period and we have recently added to the number of inspectors to better manage the employer to inspector ratio. Before any external candidates are hired, we look at internal transfers and promotions.
  • How much more am I paying each month as an employer or as an employee?
    The proposed rate increase will be shared equally between the employer and the employee. For example, the rate increase of 1.5%, increases the employers’ portion from 5.9% to 6.65% and the employees’ portion increases from 3.9% to 4.65%. In the first year, if paying on the minimum weekly wage of $260.00, the employers’ portion will increase from $15.34 to $17.29. Employees’ contribution payments on the minimum weekly wage will increase from $10.14 to $12.09. For both the employer and employee, this represents a difference of $1.95 each week. For monthly salaries on the minimum monthly wage of $1,127, employers and employees will pay a difference of $8.45. Due to the legislated Insurable Wage Increase scheduled for July 1, 2024, Contribution payments will be paid on a weekly insurable wage ceiling of $810.00, or a monthly insurable wage ceiling of $3,510. For workers whose wages are at or above the new wage ceiling, the employer portion will increase by $10.20 per week, and the employee portion will increase by $8.81 per week. For monthly salaries that are at or above the new ceiling of $3,510, the employer portion will increase by $44.19, and the employee portion will increase by $38.15. For monthly salaries that will remain at the current ceiling of $3,207.00, employers and employees will pay a difference of $24.05.
  • How mature is the Bahamian social security system?
    A social security system is generally considered matured when it has reached a level of stability and sustainability. The Pension Branch has not yet reached a state of sustainability. Increases in the cost of pensions as a percentage of insurable earnings are still occurring.
  • How does NIB Contribution Rates compare with other countries?
    The average Contributions Rate in countries within the region is 11.9%. This figure is 2.1% higher than NIB’s existing rate of 9.8% and makes it the fourth-lowest Contributions Rate of 19 countries within the region. With the exception of Barbados, The Bahamas offers Benefits that are greater or equal to the same Benefits than all other countries in this region. The Bahamas is the only country, besides Barbados, Grenada and the British overseas territory, Turks & Caicos Island, that offers the unemployment benefit.
  • What is the difference between the contribution rate increase and the Biennial increase to Pensions, Grants and the Insurable Wage?
    The National Insurance (NI) Contribution rates are a percentage of an insured person’s wages paid to the National Insurance Fund. The Rate is dependent on one's category of employment such as employed, self-employed and voluntarily insured. Since NI was introduced, the Rate was only increased once to compensate for the addition of the Unemployment Benefit branch. The Insurable Wage increase is an automatic increase every two years based on the 2010 amendments to the National Insurance regulations and introduced in 2012. This biennial adjustment in the wage ceiling ensures that workers can insure more of their income and that Benefits stay in line with inflation. For example, the weekly wage ceiling in 2020 was $710.00 therefore the balance of a person’s earnings above $710.00 per week was not insured. In 2022, when the weekly wage ceiling was increased to $740.00 per week, a person earning more than $710.00 now could insure an additional $30.00 of their earnings. The biennial adjustment to pensions and grants is based on the change in the retail price index in the two previous calendar years prior to the adjustment year.
  • Can NIB be compared with the United States’ social security system?
    When making a comparison with other social security systems, we consider schemes that are similar with the length of time in operation, population size, number of contributors, and the programme offerings. For this reason, we look at social security schemes within our region with similar demographics, geographical impacts and maturity. The United States’ social security programme has been in effect for 87 years. The structure is distinctly different from NIB’s structure. NIB will mark 50 years of service on October 7, 2024.
  • How can I ensure that my contributions are being paid accurately each month?
    Every working person is entitled to request their Contributions Statement from NIB. The Contributions Statement provides information regarding one's Contributions’ status. Information includes: the amount deducted each pay period, the portion paid by your employer, one's employment history, the amount paid on any gratitude payments, the insurable base wage and the total number of Contributions. All contributors are encouraged to register for the RSS or Registrant Self Service portal for their personal NIB account where Contribution Statements can be periodically reviewed.
  • Do I have to pay for National Insurance? Can I opt out?
    National Insurance provides income replacement to insured workers when they are unable to work due to various contingencies. It is mandated by law that employers and employees contribute 3.9% and 5.9% respectively to the NI Fund for this purpose. Self-employed workers contribute 8.8%, however are not entitled to unemployment benefit.
  • How did the NIB become owners of homes?
    NIB is the owner of four residences, one on Cable Beach and three on Prospect Ridge. All properties were purchased on the request of the Bahamian government under financed lease agreements.
  • If the Government stops "borrowing" from NIB would this help to decrease the shortfall?
    No. The shortfall is created when the amount collected in Contributions income is less than the amount paid in Benefits expenditure. It is imperative that the Contributions income exceeds Benefits expenditure so that the Fund no longer experiences a shortfall.
  • I am an employer, what do I need to do to prepare?
    There are several things that employers can do to prepare for the Contributions rate increase: Employers will have to adjust their payroll systems to the revised Contribution rate for the accurate calculation of the amount that is paid on their behalf and the amount paid on their employees’ behalf. Employers should ensure that their staff are adequately informed regarding the increase in deduction from their weekly/monthly salaries. Employers still using the electronic excel Contributions Statement (C10) should download the adjusted document from the NIB website. Employers should make contact with their inspectors should they require assistance with this transition.
  • With the Contribution Rates increase, will Benefit payments be higher in the future?
    One of the key reasons for the Contribution Rates increase is that the payment of Benefits is higher than the Contributions income. If the amount paid in Benefits increased, it would require an even larger increase to the Contribution Rates. The biennial increase in pensions and grants every two years ensures that Benefit payments stay in line with inflation.
  • Did financing in government clinics contribute to the depletion of the Fund?
    No. Financing in government clinics did not contribute to the depletion of the Fund. When NIB was introduced on October 7th, 1974, the purpose of the Industrial Branch of NIB was to replace Workman’s Compensation (private insurance paid by workers to cover themselves in the case of injury on the job). However, NIB’s funding of the Industrial Branch did not come into effect until November, 1980 creating an accumulation of funds not used between 1974 and 1980. On advice from the International Labour Organization (ILO), NIB used a portion of the funds accumulated to improve the country’s health infrastructure (i.e. the building of clinics) and the balance of the money was to be placed in the Pension Fund to extend the equilibrium of the Fund. A total of 23 clinics were financed with these funds.
  • What are some quick facts about National Insurance Adjustment to the Wage Ceiling?
    Facts: National Insurance Insurable Wage Adjustment What is the NI Insurable Wage Adjustment: The Insurable Wage adjustments ensure that workers can insure more of their income and that Benefits offered remain relevant and adequately meet the needs of Bahamians by staying in line with inflation. Why: This adjustment (increase) in the wage ceiling is based on the change in the retail price index over the two previous calendar years plus 2%. The first automatic increase occurred in July 2014 and occurs every two years. When: Next adjustment scheduled for July 1, 2024 CEILING ON INSURABLE WAGE
  • Can NIB let go of staff to make up the shortfall?
    Currently NIB is adequately staffed to meet the daily operational procedures of the Board. To reduce the staffing body would result in a shortage of personnel. This shortage would create deficiencies that would compromise customer satisfaction and productivity.
  • Third party payment providers were brought in to assist with payments. What is the current situation?
    During the COVID-19 pandemic there was an increase in claims from the unemployed. The third party payment providers, Island Pay and SunCash, assisted with making unemployment payments. The assistance from the named providers was two-fold: To assist with paying the overwhelming number of persons in receipt of the unemployment benefit To find a safer way to distribute cheque payments Eventually, assistance was extended to the payment of short-term Benefit cheques. NIB has resumed making payments from all offices throughout The Bahamas. Additionally, NIB is insisting that persons receiving Benefit payouts via cheque payment provide their banking information so that payments may be made directly to their bank accounts.
  • Should the Government put more money into NIB? Do employees and employers really need to cover the cost of increased contributions?
    The National Insurance Board is not subsidized by the Government but rather meets all business obligations by management of the Fund. However, if there is a deficit in NIB’s funds, the law requires the Government to make up any shortfall, which would in turn result in taxation on the Bahamian people. The structure of NIB is based on solidarity. It is a system implemented for workers to pay for those who are no longer able to work.
  • There are many complaints of late payments of benefit claims. How can this be rectified?
    Timely submission of Contribution Statements Processing of claims may be delayed when trying to determine if the claimant has met the necessary Contribution conditions to qualify for the Benefit. To ensure that a claimant’s work history reflects their NIB Contribution records, employers should: Utilize the Employer Self Service portal for convenient immediate posting of Contributions to employees’ NIB accounts. Submit Contribution Statements on time every month even if a payment is not submitted at the same time. Ensure that when making payments by wire transfer to memo the employer’s name, registration number and the month and year to which the payment applies. Proper completion of claim forms The most common reasons attributing to the delays in processing forms are: Forms that are incomplete Forms with inaccurate information Claimants providing debit card number instead of their bank account number Claimants’ failure to submit required accompanying documents Forms that are not signed To rectify delays in processing, claimants are encouraged to double-check their forms to ensure the accuracy of all information and that all requirements are being met.
  • Is NIB being mismanaged? Is this the reason for the depletion of the Fund?
    The National Insurance Fund is audited as outlined in section 47(1) of the National Insurance Act, 1972. The most recent conduct of the audit certified the account of the Fund as of December 31, 2022. The Report will be published once Tabled by the Minister in the House of Assembly.
  • Why is NIB increasing the Contribution Rates?
    Every five years the National Insurance (NI) Fund is mandated to undergo an Actuarial Review. The Review outlines the current and future financial developments of our social security program, providing vital insights into how we can maintain, grow, and protect our social security network. Consecutive reports have strongly advised that the NI rates should be increased. This recommendation is due to the changing demographics of the country and the increasing cost in Benefits expenditure. The most recent report, the Eleventh Actuarial Report, has indicated that without an increase, the Fund will be depleted by 2028. Currently the Fund is in a divesting mode underlining that the time to act is now.
  • Where can I find information on the upcoming contribution rate increase?
    To learn more about the NIB Contribution Rates increase, visit the website, the NIB website – or NIB’s Facebook and Instagram social media pages.
  • What is the real reason for the depletion of the Fund?
    There are two reasons for the depletion of the National Insurance (NI) Fund: Changing Demographics The changing demographics in both the working and retired population is impacting the depletion of the Fund. The NI Fund is dependent on working people paying into the National Insurance scheme to support those who are no longer able to work, for example - retirees receiving a pension. The decrease in the birth rate has resulted in the decreasing number of persons in the workforce. For example, in 2001, there were an estimated 4.8 workers for every pensioner. In 2019, this figure fell to 3.9 workers per pensioner. Current estimates suggest that by 2078, there will be as little as 1.4 workers for every pensioner. The increase in life expectancy for the aging population is another factor that is impacting the depletion of the Fund. At present, the life expectancy in The Bahamas is 65 years old. This is projected to increase by 4 years for men and 3.9 years for women. Therefore, retirees will receive pensions for a much longer time than in previous decades. This means there will be an increase in payouts for overall and long-term Benefits. Benefit Expenditure ratio to Contributions Income The increase in the cost of Benefit payouts is far exceeding Contributions income thus resulting in a negative impact on the Fund’s cash reserves.
  • I thought NIB was for old people. Why do I have to pay?
    The National Insurance Act and Regulations require all employers who employ persons between the ages of 16 and 65 years old to pay Contributions at a rate of 9.8% of their salary up to the insurable wage ceiling. Similarly, self-employed persons of the same ages are required to register and pay Contributions at 8.8%. The purpose of National Insurance is to provide income replacement to the insured working class and their dependents in the case of loss of income for various contingencies throughout their working life. At retirement, eligible persons are paid a pension.
  • How should I ensure my contributions are being paid?
    After reviewing your Contributions Statement, if you are missing periods of Contribution payments, complete Form I5, Statement of Employed Persons, documenting the missing periods of Contributions. Your Report is confidential and the Compliance Department will provide an update within 10-15 business days.
  • Due to an IT system failure, NIB cheques were unable to be printed. Has this changed? Is there a new system in place?
    NIB is actively printing Benefit cheques every month. As we continue to modernize our processes and improve our services, customers are encouraged to provide their banking information for funds to be deposited directly to their bank accounts.
  • What are some of the immediate changes I will see when the Contribution Rates increase?
    The only change will be the amount deducted from your salary. This will increase by 1.5%. Should you have any additional questions visit the customer service department at any NIB local office.
  • Why is the NIB constructing government buildings?
    NIB has historically invested in public/private securities and real estate. Net investment in financed leases comprises buildings constructed on behalf of the Government of The Bahamas. The costs of these buildings are amortized over 25 years, and upon completion of the lease payments, ownership of the buildings is transferred to the Government. The Government is responsible for the maintenance, insurance, and taxes on these buildings.
  • How modern is the Bahamian social security system?
    NIB covers over 150,000 workers representing over 70 percent of the employed population aged 15 to 64. It offers comprehensive protection for retirement, disability, death, employment injury, unemployment insurance, maternity and sickness benefits, and prescription drug plans for those with chronic diseases. The social security system in The Bahamas is comprehensive and universal, for example: those who are not able to qualify for a pension can receive Assistance payments.
  • How can I access my National Insurance Benefits?
    NIB has comprehensive Benefits that are available to the insured. To learn about what Benefits are available visit the NIB website - All Benefits are subject to certain terms and conditions. To claim all benefits, with the exception of the Funeral benefit, claims must be submitted within 3 months from the date of entitlement. Funeral claims must be submitted within 6 months of entitlement. Claim applications may be submitted to the nearest NIB office.
  • I’m making minimum wage. Is taking more money out of my pay really going to help me?
    Yes. Without the rate increase, the National Insurance Fund will be depleted by 2028 and Benefits provided through National Insurance will cease to exist including the retirement pension paid at the end of one’s work life.
  • How is NIB ensuring that employers are paying Contributions?
    Payment Methods NIB has made it convenient for employers to make payments through a variety of options available to pay their Contributions on time every month. Employers have the option of making payments in-person at any of NIB’s twenty-eight local offices, by wire transfer or by using the convenience of online payments via the Employers Self Service (ESS) Portal. Payments made via the ESS portal are automatically credited to the Employer’s account. Compliance Efforts NIB has implemented a Regular Billings Notification system to remind employers of their obligation to make payments in a timely manner. The complement and training of inspectors has been prioritized to improve contact between NIB and the employers we serve. NIB has Installment Agreement arrangements for employers who may have fallen behind on their payments Legal Action NIB may use the legal powers entrusted by The National Insurance Act, 1972 to recover amounts owed to the Fund.
  • Does the Government pay back with interest?
    Yes. The lease agreements with the Government do incur interest which is paid by the Government.
  • Is NIB subsidized by the Government?
    No. NIB is not subsidized by the Government. NIB collects Contribution payments from employers and self-employed persons. Additional income is accumulated from investments in stocks, bonds and lease agreements. Income received through Contributions and investments is used to fulfill financial obligations such as Benefit payments and administrative costs. Assistance Program Grandfathered Into NIB In January 1975, prior to the establishment of the National Insurance scheme, the following persons in receipt of assistance from the Government (Old Age Non-Contributory, Invalidity and Survivors) were grandfathered into the NIB program. The Government continued to make their Assistance payments until these persons were deceased. Government Programs Subsidized by NIB NIB has subsidized various Government programmes that were later repaid by the Government inclusive of the National Prescription Drug Plan (NPDP) and the Government Funded Unemployment Programs. The NPDP which is administered by NIB is a government program started in 2010. It started as one of several initiatives by the Government of The Bahamas to improve access to health care services; and in doing so enhance health and the quality of life for Bahamians. The NPDP was funded by NIB, however in 2015; the Government undertook the funding of the Drug Plan. During the COVID-19 pandemic, the Government-Funded unemployment programmes were administered and funded by NIB. In July 2020, the Government began repaying funds used to finance these programmes. The Government has repaid NIB all funds related to the Government-Funded unemployment programmes.
  • What is the status of the homes owned by NIB?
    NIB continues to hold the properties under lease agreements for the Government of The Bahamas. The Government announced on May 27, 2023 that they intend to start construction of the new Ministry of Finance and Aviation protocol house which will be located at the Cable Beach address.
  • Is the increase in Contribution Rates really due to a population that is living longer?
    Yes, this is just one of the reasons for the increase in NIB Contribution Rates. With retirees now living longer than in previous decades, it is expected that they will receive pensions for a much longer period. Consequently, long-term Benefit payouts and overall Benefits expenditure are projected to increase. In 2021, $231,064 was paid out to 2,781 retirees, compared to the $143,401 paid to 1,802 retirees in 2011.
  • Is the government paying on the lease agreement for buildings financed by NIB?
    Yes. The Government is making payments on all outstanding leases with NIB.
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