NIS’ Contribution To The Financial Information Month

The National Insurance Services is pleased to be a long-standing partner with ECCB in advocating and promoting financial literacy within the ECCU territories. This year, financial literacy is driven by a theme “Plan For Uncertainty……Make Insurance Your Priority” which is inextricably linked

with the ethos and business model of the NIS.

Social Security is a social insurance program geared towards encouraging social justice, solidarity, equity, economic development and poverty alleviation. The socio-economic necessity of the system caused it to be recognized and respected by various international conventions and instruments. For instance, the recognition of social security as a basic human right was enshrined in the 1948 Universal Declaration of Human Rights. In some countries such as Germany and Brazil, social security is a right guaranteed by the Constitution.

In St. Vincent and the Grenadines, your social security system has evolved into a Systemically Important Financial and Social Institution. This is evidenced by its proven record of transforming lives and shaping societies. The systems provide equitable, adequate and affordable income protection to approximately 44% of the population. And this is backed by an asset base which represents 25% of the country’s Gross Domestic Product.

Your NIS is a social safety net system that provides financial protection against lifecycle risks such as maternity, illness, disability and retirement through an income replacement program. Essentially, you are protected against life cycle uncertainties from the Cradle- where you start life to the Grave- where you end life. The stories are now widespread and viral of this program and its direct positive impact on safeguarding people’s lives, livelihoods and wellbeing.

Your NIS is an essential vehicle to reduce individuals, families, communities and society’s vulnerabilities to loss of income from life uncertainties of employment injury, disability, death and illness.

The comprehensive benefit package from maternity benefit, through retirement benefit to death benefits should be financed by contributions levied on employment earnings up to the wage ceiling of $4,333.00 and should be paid by employees, employers, self-employed persons and voluntary contributors. It is, therefore, imperative that all these categories of persons make National Insurance (social insurance) a priority as mandated by CAP 296 of the Laws of St. Vincent and the Grenadines.

Funds that have accumulated in previous years that are not yet required for the payment of benefits and administrative expenses are invested locally, regionally and internationally in various types of deposits, loans, bonds, equities and properties.

The investment of funds is guided by the principles of Safety, Yield, Liquidity and Social and Economic utility. The Board is duty bound to ensure that the system remains sustainable. To date, your NIS has fulfilled its promise of meeting its financial obligations on time and in full. This would continue in the foreseeable future.

In pursuit of its safety mandate, the Board and Management ensure excellence in administration and administrative efficiency. The NIS prides itself on minimizing costs to ensure that a higher-proportion of the contribution dollar is prudently invested to strengthen the safety net.

Your NIS also protects you on a macro level through its contributions to local economic and social development. The annual benefit expenditure of approximately $65 million directly influences local economic activities. Similarly, your NIS’ investments of approximately $300M in local securities such as bonds, loans and deposits aid with infrastructure developments and job creation.

During its 32 years of operations, your NIS has made significant contributions in building the nation’s social capital. In education, your NIS invested over $10 million in the National Economically Disadvantaged Student Loan Programs that cover almost 500 beneficiaries.

In the area of health, your NIS made several major contributions to the Government and People of St. Vincent and the Grenadines in the form of equipping the hospital with ultra-Sound machine, CT Scan Machine and other major equipment.

With regards to housing, the NIS partnered with BOSVG to finance the 100% Mortgage Finance program for Civil Servants. In the important area of poverty alleviation, the NIS provided life-time income security for economically challenged elderly persons through the Non-contributory Assistance Program and the Elderly Assistance Programme. In addition, your NIS built two magnificent facilities that provide avenues for our elderly citizens to connect, relax, learn a trade and socialize.

In providing these critical and essential services to our people, your NIS, like other social security systems, faces a myriad of risks ranging from demographic, environmental, technological, economic and labour market. These significant risks threaten the system’s ability to provide sustainable and adequate benefits to the people of SVG. The nature, occurrence and incidence of these risks are complex, changing and multifaceted.

We all just witnessed the devastation of parts of Bahamas as a result of Hurricane Dorian. This is just about two years after back-to-back category 5 hurricanes wrecked several Caribbean destinations.

Dominica was hard-hit by Maria. This region has not yet fully recovered from one of the most severe economic crises of 2008. In addition, the ECCU territories face the plights of double-digit unemployment rates and population ageing, of increasing life expectancy and declining fertility rates.

Notwithstanding the many-sided challenges, your social security remains robust and resilient through its diversified asset base, dynamic leadership and people-centered administration.

During the said crisis, your social security served as an economic and social stabilizer. Your benefits amount and frequencies remained unchanged, loss of income in the period was replaced and investments contributed to economic enhancement.

Your investments and contributions to NIS should be a Priority because your financial security is guaranteed.

 

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