I did not get anything wrong, says Eustace

Leader of the Opposition, Arnhim Eustace is asserting that he knows what he is speaking about when it comes to issues regarding the financial situation of the National Insurance Services (NIS).{{more}}

Eustace was responding to a letter which appeared in the press over the weekend.

The letter titled ‘Arnhim Eustace is wrong about the NIS’ and written by R.T. Luke V. Browne stated that Eustace misled the public on the financial condition of the NIS.

“The Leader of the Opposition and his apologists and sympathizers have since demonstrated tremendous irresponsibility and scant regard for the truth in related commentary,” Browne wrote in the letter.

The letter said that Eustace had given the impression that the NIS was going to run out of money by 2016 and the truth was that, based on actuarial projections, the NIS could in fact meet its obligations to pensioners and other operational expenses without reform up to 2040.

But Eustace, speaking on the ‘New Times’ radio programme on Monday, while admitting that he did not usually respond to letters, said that it was the International Monetary Fund’s (IMF) Article IV Consultation report that pointed out that contributions will not be able to cover expenses.

This was where he got his information, Eustace said.

And according page 16 of the report, the latest actuarial review showed that in the absence of parametric reforms, the contributions collected will not be sufficient to cover expenses after the year 2016.

“And that investment income will have to be used as a supplement. The review also showed that the reserves are projected to start falling in 2027 and will be depleted by 2040,” the report stated.

“So, I do not know what it is he’s trying to say. We are not misleading anybody or misinforming anybody,” Eustace said.

Browne’s letter also stated that the Opposition Leader said that the NIS stood to lose $62 million as a result of the collapse of the British American Insurance Company Ltd (BAICO) and Colonial Life Insurance (CIL) and that he (Eustace) had made a big deal about that fact that the profit of the NIS had fallen from $27.4 million to $5.5 million.

But Eustace fired back, saying that he did not get anything wrong and that he knew what he was talking about and that he was worried about the inability of the NIS to recover monies used in investments.

He explained that investment income will have to be used as a supplement and that these reserves will be expected to start falling in 2027 and will be depleted by 2040.

“That’s what we are trying to avoid. If we have to use that money now to pay contributions, what is going to happen down the road?” Eustace questioned.

“Sooner or later you are going to have to increase rates and increase it significantly,p if we continue to operate like that,” he said.

Eustace further contended that the longer the government waited to implement reform would mean that more money would have to be deducted from people’s pockets.

He knocked Browne, the author of the article, saying that he was not well informed on the issue.

“He doesn’t know what he is talking about. This is no joke, this is a life and death matter for a lot of people in this country who put in 30, 40 years of service,” Eustace said, adding that he took strong objection to what he called the foolishness that was written in the press. (DD)