Grenadians Face Pie in the Sky for Increases in NIS Rates

Joseph K. Roberts

[ By J. K. Roberts ( Sound Public Policies Advocate ); Circulated on Monday, 27 February 2023 ]

To prove straightway on entry to State Power its political boldness and will, its governance capacity and knowhow, its leadership role in taking ‘tough needful’ decisions, and particularly of its compassionate interest about the pensions for retirees and the social protection architecture of the country, the current administration of the National Democratic Congress (NDC) embarks on implementing ‘purported’ recommendations of the Actuary Reports concerning the National Insurance Scheme (NIS), as an aspect of Pension Reform.  Understandably; this ‘impetus for demonstration and dominance’ is fundamentally about seeking praises as mileage for the 23 June 2022 NDC-administration with its “Transforming Grenada” agenda, over the past two-term serving administration of the New National Party (NNP) since 19 February 2013.  However, despite the expected criticisms and pushback to its undertakings; many genuine concerns have arisen regarding the strategies and approaches by the Administration on some critical welfare issues, including the International Monetary Fund recognized World Bank assisted Support for Education Empowerment and Development (SEED) programme which is about ‘poor relief’ measures with focus especially on eligible schoolchildren, unemployed and elderlies in the rural areas. 

The NDC-administration may feel quite ‘comfortable and confident’ about its policies and pursuits amongst the Grenadian-people, because of its fulfillment of the party’s promises with the “Payment of Docked Salaries to Teachers and other Public Officers” (about $1.2 million paid to 1,721 affected employees) and “Payment of Pensions” (an estimated $60 million to $75 million to facilitate the pensions and gratuities to over 500 retired employees), as novice Prime Minister Dickon Mitchell addressed in celebratory tones on 02 October 2022.  On the other hand; it could be argued that the NDC Administration self-inflicts political disgrace by its relatively ‘weak defense’ for having to comply with the ‘temporary monthly $150.00 increase for one year’ to each of SEED’s beneficiaries last year. By stopping this year, the $150.00 enjoyment, the Administration has been captured by a ‘most possible’ political trap of the experienced former Prime Minister Keith Mitchell.  Taking into account all of the relevant factors including that the 2023 Budget’s allocation of $18 million for SEED is the same funding as in 2021 and 2022, the extra $8 million to $10 million “to provide support to over 1000 (‘vulnerable’) households” would have been resolved in accordance with the started World Bank’s technical assistance towards the recertification and targeting of the beneficiaries. It should be instructive that the payments for both the Docked Salaries and Pensions-benefits were not also budgeted by the NNP-administration.

In bringing further the ‘equity perspective’ on the Government’s fiduciary role in attending properly to the varied socio-economic challenges being faced by all demographics in the nation, it is relevant to be also mindful of how political expediency can lead to destructive and embarrassing consequences. That is; in the High Court judgment in the Civil suit brought against the NNP-administration by a school teacher / public servant “to examine whether the Government of Grenada …. is lawfully entitled to withhold remuneration from public officers (‘public servants’) who absented themselves from work as a result of industrial action”, Justice Mr. Raulston Glasgow ruled in favour of the Government.  Glasgow chided the Secondary school teacher, and in concluding he documented thus. “The long and short of it therefore is that this claim must fail. For the purposes of the laws of Grenada and in particular the relationship of employer and employee subsisting between the Government and public servants in Grenada, the common law rule of “no work, no pay” is quite alive. Accordingly the Government was not acting illegally or in violation of Ms. Lusan’s constitutional rights when it refused to pay her salary for the days that she did not work”. This ‘possibly’ November 2022 Judgment against the schoolteacher was not challenged by NDC Administration and thus presents a ‘precarious scenario’ going forward for trade unionism and the NDC-administration.  What will take precedence; political policy or the Court Ruling?

The previously internet-circulated article, “Pensions Payment Should Not Be Exploited By Grenada NDC Government”, questioned. “Had Keith Mitchell appealed the Glasgow Judgment (‘in favour of pensions payment’) before theJune (2022) general elections, what would have been the stance of Dickon Mitchell, especially when considering that Dickon Mitchell paid the docked salary to public officers even as a litigation against the Government on the issue was in progress?”  Should the Judgment on the Docked Salaries necessitate refund by the employees to the Government; or as the Judge remarked about the choice of the particular lead policymaker, “These are all matters within the rights of the employers”.

The gradual yearly increases in the contribution rate to NIS as of 01 February 2023 and in the retirement age in or before January 2024, seem to be based on or for different purposes but which are been divulged to the people in a piecemeal manner. This seemingly ‘maneuvering and deceiving’ about the workings and intentions of the NIS would arouse more confusions and uncertainties about engendering confidence in the Government and NIS, as well as about enjoying any adequate benefits from the NIS.

First. Dickon Mitchell as Minister of Finance presented in the 2023 Budget Statement that “in the current construct, the NIS will be bankrupt in the next 10-12 years …. Therefore, we will implement the following recommendations …. (i) Increase the pensionable age on a phased basis from 60 to 65, starting with a move to 61 by January 2024. (ii) Gradually increase the contribution rate for employers and employees from its current level of 11% to 16% by 2031, starting with an increase in 2023 to 6.5% and 5.5%, a 0.5% increase for employers and employees, respectively”.   Secondly; in a Government Media Conference on 24 January 2023, Philip Telesford as Minister responsible for Social Security emphasizes similar increases thus.  “This would now enable us to properly fund an unemployment benefit scheme to benefit the population; this move is extremely critical …. So we are making a number of adjustments and as the time goes on, a full rollout of the PR is expected to come from the NIS as to what they are doing and Government pledges its continuous support to the Board and to the management of the NIS …. “.

Third.  In the public relation (PR) campaign of NIS, Director Mr. Dorsett Cromwell, also rollout ‘some goodies’.  “ …. the current contribution rate cannot keep the NIS afloat for much longer.  An empty fund means limited pension and benefit disbursements to you and your loved ones. …. With these changes, we are now more comfortable to increase some benefits that you will enjoy.  The minimum pension amount will increase by 25%, from forty-six forty to fifty-eight dollars weekly.  The minimum pension rate for survivors will also increase; widower, widow and dependent parent 100%, children and orphans 50%.  Cromwell’s ‘comprehensive’ delivery also speaks on a “necessary” permanent unemployment benefit to provide “support to those who are experiencing a temporary loss of employment“.  However; no indication was made about the commencement of the increased benefits and there was no assurance about any efforts on the part of NIS to improve its administrative operations especially on enforcement.

In also considering the aim of the Government to introduce the more than a decade and a half ‘outstanding’ National Health Insurance (NHI) before or in the beginning of 2025, which is anticipated to be financed by the population and be administered by the NIS, the related article “More Pressure On Grenada NIS By New NDC Government!“ highlights some critical concerns concerning the scope and completeness, as well as the manner and circumstances, about the implementation of those Actuary’s recommendations. The ‘hypocrisy, lopsidedness, secrecy and insult’ about addressing the promoted ills of NIS, which is due largely to the faults of the powers-that-be should be glaring. As a patriotic concern; is it about ensuring good and prudent governance, especially in terms of the strictest observance of prescribed State ‘confidentiality and security’, for the Government or rather the Cabinet to take drastic actions and / or to place burden on the people, emanating from the findings of statutory investigations and reports such as the annual reports of NIS and the triennial or other special actuarial reports on NIS, without first having those reports laid in the House of Representatives where required, and having consultations for inputs from stakeholders where applicable, in designing related policies and practices?