IN its brand-new report on Trinidad and Tobago, the International Monetary Fund (IMF) has urged the Government to increase National Insurance Scheme (NIS) rates.
The IMF said the NIS deficit is expected to widen, “gradually depleting its reserves by 2030.”
The international financial agency added: “The authorities’ proposal to increase the retirement age to 65 years would help partially contain the deficits.”
Then the IMF stated: “Increasing contribution rates would also help.”
This is the latest declaration from the agency about the NIS’ dire financial state and its nod to increasing the retirement age and hiking contribution charges.
The Government has so far not responded directly to the recommendations, but actuarial studies have revealed that the NIS is heading for insolvency.
This is a result of a reduced number of workers contributing to the fund and the fact that beneficiaries are living longer and, therefore, costing NIS more than ever.
An earlier NIS study had recommended that NIS contributions be increased from 13.2 per cent to 16.2 per cent of insurable earnings.
There has been a lukewarm response in T&T to the issue, but noisy public demonstrations have taken place in France over plans to change the retirement age from 62 to 64.
Trade unions and other public bodies held daily protests to protest the decision by President Emmanuel Macron.
In its most recent report, the IMF also urged the Government to diversify the economy and to “remain vigilant to vulnerabilities in the financial system.”
An increase in NIS rates would be yet another blow to the cost of living in Trinidad and Tobago.
Inflation, especially the cost of food, has been climbing each month, and consumers are also paying more for fuel.
