NIS in healthier shape says Finance Minister

The reform measures being implemented by the National Insurance Service (NIS),since 2024, are yielding growth and putting the institution on a stronger financial footing. A number of reform measures for the NIS formed part of the 2024 Budget package, and one year later, the measures are already bearing fruit, Minister of Finance, Camillo Gonsalves said on Monday, January 13, as he presented the 2025 Budget in Parliament.

He said the NIS has made remarkable progress since 2024.

In 2023, the NIS recorded a net loss of $430,000, but last year, it recorded a net profit of $22.9 million, Gonsalves stated.

Minister Gonsalves explained that this improvement was made possible by the implementation of pension reform measures, economic growth, and improved job creation.

Last year, the NIS collected $95.4 million in contributions, as against $76 million in 2023.

Minister Gonsalves said this improved figure represents a 25 per cent growth in the contribution income of the NIS.

The minister attributed this partly to the increase in the contribution rate from 10 per cent to 12 per cent, which was one of the reform measures implemented in 2024.

The finance minister also said than an improvement in the compliance rate among the 46,321 insured persons listed with the NIS is also partly responsible for the improvement in contribution payments.

Last year, the NIS investment portfolio yielded $33.5 million, or 7.2 per cent in returns.

On another positive note, Minister Gonsalves said the NIS has been able to reduce its operational expenses.

The NIS has moved from spending 14 cents out of every dollar in contributions, to now spending just 10 cents out of every contribution dollar.

In commending the NIS for its improved administrative performance, the minister pointed out that last year, the NIS also paid out $97.3 million in benefits.

Minister Gonsalves said the 2024 reformed measures have helped to improve the viability of the NIS, and have added 25 more years to its financial life.

Last year, the NIS undertook reform measures, all aimed at maintaining the sustainability of its fund. One such measure is the gradual increase of the contribution rate from 10 per cent to 15 per cent. The contribution rate now stands at 12 per cent, as against 10 per cent in previous years.