NOTWITHSTANDING PRIME Minister Portia Simpson Miller's stated desire to help the poor and provide a fillip to micro enterprises, she needs to provide further and better particulars on her government's decision to dip into the National Insurance Fund (NIF) for $1 billion, with which to make loans to small businesses.
What her administration, or perhaps the board and/or investment committee of the NIF needs to explain, is precisely to whom that loan will be made, for how long and the rate of return. And while they are at it, the NIF board might address what analysis was done of the investment and potential alternatives, any opportunity value which might have been foregone because of this decision, and the impact, over the long term, on the benefits to be derived by those whose money is at stake - the contributors to the National Insurance Scheme (NIS).
In the end, it might be proven that the Government and those we entrust with the management of the people's resources, made the best decision. But the people whose cash is being invested are owed a full explanation.
In the meantime, we believe that the concerns and issues raised by Mr. Bruce Golding, the Leader of the Opposition, regarding the management and utilisation of the NIF, are worthy of serious consideration.
Like Mr. Golding, we believe that the trustees of the NIF should be exceedingly careful with the stewardship fund and hold, like him, that surpluses, if any there are, should go first to the legal beneficiaries, rather than creamed off for other purposes. Already, as Mr. Golding pointed out in his speech on Wednesday, the pensions paid out to NIS contributors are low and incapable of meeting the living expenses of beneficiaries.
There are other considerations which should propel the trustees to make decisions which will maximise returns to the NIF. We are, of course, not privy to the findings of any recent actuarial reports on the NIS, but the demographic data suggest an increasing greying of Jamaica, although not yet at the rate affecting First World countries.
The fact, though, is that Jamaica has achieved a longevity approaching First World standards and while people are living longer, the birth rate has slowed down. The upshot is that based on the evidence, in a generation or so, there will be substantially more people dependent on state pensions. The NIS will not only be required to fund more people, but at rates that are morally defensible and adequate for the sustenance of life. This, ultimately, is the mission of the NIS/NIF and what the Government and trustees must ensure.
