The failings of the National Insurance Board (NIB) are based primarily on political interference

We need a radical change to the way the National Insurance Board (NIB) is run

A Response to Lindon Nairn's NIB proposal

By Norman Trabulsy Jr

While I am in wholehearted agreement with Lindon Nairn regarding the need for immediate and drastic action to fix NIB, I am not convinced by his proposed solutions.

Firstly, yes, the failings of NIB are based primarily on “political interference”, as he states.  Now, I would ask what is included in Mr. Nairn's idea of political interference?  Is it outright misappropriation of funds?  Is it by using NIB as a slush fund?  Is it by failing to look at the actuarial trends and responding accordingly?  Is it by political appointments of upper management who are wholly unqualified for these positions?  Is it by political interference in the collection and distribution of benefits?  Is it by political interference of the laws governing NIB, and the oversight required?  Is it by deliberate lack of accountability, and the pace of technological innovation?

I am not convinced that every public service should be outsourced to the private sector.  Private profits, as well documented in health care for instance, is what is driving the rapidly rising cost of health care.

The U.S. is a perfect example of this.  U.S. government Medicare administrative costs are 1% - 2% of revenues.  Private health insurance companies, such as our Colina, have 15%-20% administrative costs. 

It is a fact that most bankruptcies in the U.S. are because of health care costs.  Would God approve?

What some people call reckless inefficiency in government is simply called reasonable corporate profiteering by others.  Seems most of us have drank the private sector Kool Aid.

Mr. Nairn says, “ Until recently, any private citizen could simply put money into fixed deposit accounts at any financial institution and generate multiple times NIB's net earnings.”

Judging by the statistics available to all of us, what percentage of our private, average Bahamian citizens can put any money into a bank at all?  As to my knowledge, the majority of Bahamians are living pay check to pay check - unable to cover a $400.00 emergency.

Some things in this world, especially health care, should not be left to the “free market”.  Granted, here in The Bahamas we have little visionary and educational exposure to models different from our guiding light rent seekers to the north.

Not exactly a good example of Christianity in action, is it?

In my lifetime, I would be hard pressed to give examples where the private sector really did out perform previously government run services, in an educated and free society.

Instead of our government hiring the same professionals who have successfully run other similar institutions, we chose to place political hacks who have neither the intelligence, education or integrity required to lead, and then we wonder why that institution has failed.

Is this not our history in a nutshell?

You want a well functioning enterprise?  Then hire a qualified person to lead it.  Just like the private sector does.  Pay them well.  Let them hire and fire as they see fit, and leave them alone.  We will then get acceptable results.  Just like the private sector does.  Is this such a hard concept to understand?

The “heavy lifting” Mr. Nairn speaks of is not in privatizing NIB, rather it is in recognizing our own shortcomings and failings, and fixing them.  Isn't this always the heavy lifting we require?

In my estimation, not every human good or government service requires private profit to succeed.

Batelco was sold so that we would ostensibly get more efficiency and better service.  Can anyone tell me that selling BTC was not a deal made behind closed doors that enriched a handful of greedy politicians and their private sector friends?

Has service improved?  Does The Bahamas benefit from the sale of BTC in any way?

In fact, I would argue that a truly Christian perspective would see NIB, health care, life saving drugs, minimum food allowances, as God given rights that should not be touched by the money changers.

The very idea that a “company” should profit from health care should be offensive to a true, right thinking Christian.

Let the private sector gamble to their hearts delight.  But, when they cross over into essential human services, we need to let them sit small.

I agree with Mr. Nairn that we need a radical change to the way NIB is run.  That much is clear.  However, I fear that NIB, like BTC, will simply become a revenue stream for a handful of millionaire and billionaire corporate executives who have little concern for our people, and every concern for their private profits.

Norman Trabulsy Jr.
Mangrove Cay, Andros

The Bahamas government has failed to put forward a compelling argument for an increase in the National Insurance Board (NIB) rates

Why is the National Insurance Board (NIB) in its current state?

By Lindon Nairn

The government has failed to put forward a compelling argument for an increase in the National Insurance Board (NIB) rate.

Yes, arguments such as “pension payouts exceed contributions” appear strong on their face, but they fail to tell the whole story much less point to a sustainable solution.

It is quite possible that an increase in NIB’s rate is necessary, but such a decision should follow disclosure of what drove NIB to this position and how NIB might be dramatically restructured to achieve maximum sustainable results.

Why is NIB in its current state?  First, new and improved benefits were regularly added — from inception — without any sustainable plans to pay for them.

While insureds enjoyed those better benefits, it was irresponsible to put them into effect without first ensuring that appropriate steps were taken to fund them.

Administrations took such reckless steps to garner political support without regard for the long-term implications of their actions.

Second, alarmingly, NIB’s net earnings, excluding contributions made and benefits paid (”net earnings”) is barely higher than one percent of its total assets.

(This net earnings return on assets is derived from 2019 annual financial statements.  It is likely that it has fallen since.)

Until recently, any private citizen could simply put money into fixed deposit accounts at any financial institution and generate multiple times NIB’s net earnings.

That fact underscores the high administrative costs associated with running NIB, its low gross earnings and, most importantly, it demonstrates that ultimately NIB provides no net real value to its contributors.

Third, based on actuarial reports, the pension shortfall is due in part to lower than expected population growth.

To me, a pension plan that is reliant on ongoing population growth, even though a common practice globally, has inherent elements of a pyramid scheme.

Of course, it is accepted that lower than projected growth could impact unit costs.

Finally, since its founding, NIB has had many successes, however, in the current technological and economic climate, NIB has become anachronistic.

It has not kept pace with the times and no doubt that is due largely, if not entirely, to political interference.  One can point to much evidence of inapposite political engagement, but few speak more loudly to that than the reshuffling of NIB’s board of directors every time a new party wins a general election.

How might NIB be fixed?

Let me state upfront that these recommendations are both radical and incomplete.

They are intended to offer only a fragrance of what might be done.

NIB has at least four broad divisions: pension, unemployment, sickness and drugs.

For the purposes of contributions, administration and law, with the exception of sickness and drugs, those areas should be completely distinct.

Those benefits are very different creatures and managing them together covers deficiencies and hides opportunities.

NIB’s administration of pension should cease.

Instead, established private entities that meet specific criteria should be allowed to manage contributors’ pensions.

The enabling legislation should include controls such as linkage to business license and the eventual movement to personal savings accounts (PSAs).

Regarding the latter, contributors under a certain age should immediately move to PSAs.

Whether or when such a step can be taken will depend on what impact it might have on the current actuarially computed shortfall, which could crystallize and thereafter weigh negatively on the national accounts.

It is acknowledged that transitioning away from the current model requires heavy lifting.

Furthermore, with the new structure, a number of incentives designed to increase employees’ and even employers’ contributions could be introduced.

Given that the above action will increase net earnings by 300 percent to 700 percent, the actuarially computed liability should fall dramatically.

Today, I am afraid there is no need for NIB to itself administer a sickness and drug plan.

There are four local companies capable of providing those services at costs well below and efficiency considerably above what NIB will ever likely achieve.

As such, NIB should engage a private entity to administer most, if not all, aspects of its sickness and drug benefits plan.

With that said, the administration and other charges by private entities would require prudent and intense evaluation.

While a portion of what is now NIB’s employer and employee contributions should go to employees’ pension accounts as outlined above, the remainder should go into the unemployment and sickness and drug pools.

The management of those categories will likely reveal underfunding and the need for incremental contributions.

It will aid transparency and help policymakers and beneficiaries to be more realistic with respect to benefits.

The above moves will make a substantial amount of the resources deployed by NIB superfluous.

As for NIB’s staff, they should be offered an unprecedented early retirement package — up to three years.

That will not have long-term deleterious effect on the scheme.  NIB’s redundant administrative buildings and other assets should be sold.

It is important to re-emphasize that the above addresses only a handful of the considerations that have to be made.

This is a complex matter requiring the engagement of professional groups from various disciplines.

The status quo, including blindly raising rates, is harmful to our economy and by itself does not assure sustainability. Drastic changes are mandatory.

— Lindon Nairn

Source 

Let’s get real on redeeming the National Insurance Board (NIB) fund, Minister Myles LaRoda

Let’s get real with National Insurance, Minister Myles LaRoda 

By Dennis Dames

Minister of State in the Office of the Prime Minister with responsibility for the National Insurance Board (NIB), Myles LaRoda, has been talking a lot lately about increasing contributions of employers and employees in order to stabilize the NIB fund.

That is an impractical proposition by itself in my view as the NIB fund is already in a very critical state, and employers and employees are presently paying a combined 9.8 percent!

How much higher does any sensible government thinks that that rate can realistically and practically increase without serious financial ramifications for the employer and employee?

The minister stated that the government is in no position to assist NIB financially.  What nonsense!

NIB’s problem has always been poor governance and a lack of prudent vision from its inception, in my humble opinion.

Too much political interference and sweetheart jobs over the decades have contributed significantly to the deplorable state of the NIB fund today.

Add the issue of inept management, over-staffing and political crony jobs, and we get an even grimmer picture of the depressing and ongoing disgraceful state of the rapid erosion of the NIB fund.

The government must find a way to become a partner in the rescue of the NIB fund, Minister LaRoda.  Let’s start with reducing the government’s travel budget, for example.

We live in the 21st Century and technological age where we can show some international leadership, and encourage and persuade our respective global counterparts to have more conferences online.  We can use the savings from the elimination of unnecessary state, political and sweetheart travelling to enhance the NIB investment fund.

Let’s stop acting brand new and talking fool like we just realize that more and more of us are living longer, and are thus putting a strain on the NIB fund by collecting our well deserved monthly pension checks.

Let’s get real on redeeming the NIB fund, Minister LaRoda.

Now is the time for the government of The Bahamas to show real political and executive leadership in the salvation of the NIB fund by letting the people know what the government’s financial contribution is going to be until the NIB fund is put in to a healthy position once and for all - for the future posterity.

The Bahamas government’s unwavering commitment to protect the Bahamian borders and enforce the lawful processes for entry into The Bahamas

Any and all unlawful entrants in Bahamian territory will be swiftly processed and repatriated to their homeland

NASSAU, The Bahamas -- The Hon. Keith Bell, Minister of Labour and Immigration told members of the House of Assembly while delivering a communication Wednesday, February 1, 2023 about the government’s unwavering commitment to protect our borders and enforce the lawful processes for entry into The Bahamas.  

During my last communication, he said - “I stated that I know and fully accept that we will be measured by our work, our results and not our speeches.  I further stated that The Department of Immigration is committed to doing the work needed to deliver the results that the Bahamian people demand.

"Our work to address this pressing issue did not commence with my communication," he said, "nor did it commence with the many false articles and stories authored by fringe groupings, this work began ‘ON DAY ONE.’

Within months of coming to office, this administration, led by the Hon. Philip Brave Davis Prime Minister and Minister of Finance, uplifted the spirits of a demoralized and broken Immigration Department by immediately remedying the longstanding confirmations and promotions of officers in various ranks which were left outstanding by the former administration from as far back as 2014. 

“I might add, this directly impacted more than 250 Immigration Officers or more than 30% of the human resource of the Department.”

Minister Bell continued that the administration immediately recruited and commissioned the largest immigration squad in the history of the Department, “increasing the total number of immigration officers by over 30%.  THIRTY PERCENT.”

He noted: The Progressive Liberal Party government also made ‘the single largest investment in the history of the Royal Bahamas Defence Force’ with an injection of over $200M to upgrade the Defence Force through the 'Sandy Bottom Project':  "We bought a whole new fleet of vessels including HMBS Lawrence Major, the first ‘roll on, roll off’ vessel of its class acquired by the organization.

“In anticipation of present circumstances,” Minister Bell said, “we established a temporary holding facility in Inagua with the capacity to hold over eight hundred (800) persons.

“This is to reduce the time required for irregular migrants intercepted in the Southern Bahamas to be returned to their home countries.

"I warned persons that any undocumented migrants will be taken into custody on January 18.  This was extended to persons working without a valid Work Permit or working outside the scope of their work permit.  This warning was further extended to persons who enter the Country as a visitor and illegally engage in employment and/or unlawful activities.”

The Immigration Enforcement Unit conducted operations to infiltrate a number of ‘escort services,’ January 19.  It is well known that these escort services consist of persons who enter the country as 'visitor' and also overstay the time granted by immigration to remain in the country.

In one operation, an escort service known as 'The Mango Season Girls' was dismantled.  Four Jamaican females were taken into custody in that sting operation.  They were charged and placed before the courts, convicted, sentenced, deported and placed on the restricted List.

On the 20th January, 2023, a joint operation by Immigration and the Royal Bahamas Police Force in the eastern area netted a number of irregular migrants, one of whom was found in possession of a fraudulent Work Permit.

Just a matter of days after his last address, “a vessel carrying 396 irregular migrants from Haiti was intercepted by the United States Coast Guard in the vicinity of Cay Sal Bank.   "In accordance with our plans to address an increase in interceptions, the Coast Guard was directed to transport the intercepted migrants to the temporary facility at Inagua where 375 migrants were handed over to Bahamian officials on January 24.  Some 21 migrants (mainly minors) remained with the Coast Guard on their vessel."

He explained, with the activation of the temporary facility in Inagua, the Government moved to quickly deploy additional resources to support the facility.  The Ministry of Health mobilized a team of Nurses and Physicians to fly to Inagua where they erected a field hospital donated by the United States government.  Food and other supplies were shipped in by the HMBS Lawrence Major.

"The Royal Bahamas Police Force and The Royal Bahamas Defence Force continue to assist the Department in providing additional security on the Island.

"Unfortunately, the interception near Cay Sal was not isolated.  On the 24th January - The Department of Immigration was notified that a vessel carrying unlawful entrants from the Republic of Haiti ran aground in the area of The Bluff, South Andros.  Officers from The Royal Bahamas Police Force, stationed in South Andros moved swiftly and apprehended a number of the unlawful entrants to our shores.  Combined with reinforcement teams from the Defence Force and Bahamas Immigration, a total of 41 persons were taken into custody following a full search of the area and surrounding communities.  The 41 persons were subsequently transported to the Detention Centre here in New Providence."

On Monday the 30th of January, Immigration Officials received notification of a suspected smuggling vessel sinking in the vicinity of Grand Bahama.  Law enforcement officials quickly mobilized and 19 individuals were taken into custody.  

They Included:

• Eleven Haitian Nationals
• Two Ecuadorian nationals
• Two Chinese Nationals

Further, four Bahamian Males suspected of being the organizers were arrested and are expected to be placed before the Courts along with this group once the investigations are concluded.

"We are challenged, but yes, we are prepared; yes, we are ready and yes, with God’s grace and mercy, we will ride this wave!  In my earlier communication, I issued a stern warning and advised the Bahamian people that any and all unlawful entrants will be swiftly processed and repatriated to their homeland."

Three repatriation exercises were undertaken, recently, by the Immigration Department totaling 251 persons including

• Thirty-one Cuban Nationals
• Two hundred-and-twenty Haitian nationals

 Source

The Bahamas Department of Immigration new policies regarding acceptance and processing of applications for Work Permits and Permits to Reside from the Republic of Haiti

The Bahamas Department of Immigration announces changes to policies regarding acceptance and processing of applications for Work Permits and Permits to Reside from the Republic of Haiti

In light of recent instability involving the Haitian Government in Haiti, the Government of The Bahamas has made decisions that will affect migrants from Haiti, said Minister of Labour and Immigration the Hon. Keith Bell during a press conference at the Ministry of Labour Friday, January 27, 2023.

“Existing and new Permit to Reside applications for Haitian citizens will only be considered on a case-by-case basis and approval will only be granted in the most exceptional circumstances.

“No new Work Permit applications for Haitian citizens will be processed until such time as revised protocols are introduced to verify and authenticate documents issued by the Haitian government and the Haitian national police,” Minister Bell said.

“All existing work permits, applications and renewals for work permits will be subjected to the most vigorous review and scrutiny.  Applicants should note that as a consequence, the time frame for the processing and determination of such applications will be impacted.”

“The government of the Bahamas is resolute in its commitment to protect its borders and enforce its immigration laws,” Minister Bell said.  “If you have information of breaches to the immigration laws, please contact the Department of Immigration and information can also be forwarded via the Department’s website at www.immigration.gov.bs under the tab ‘contact us!'”

“On Thursday, the 26th January, 2023,” Minister Bell said, “the Haitian National Police paralysed Port-au-Prince, Haiti by blocking streets and forcing their way into Haiti’s main airport.  Reports indicate that the officers also attacked Haiti’s Head of Government Ariel Henry’s official residence. Roads in several cities in the North of Haiti were blocked by protesters.  Yesterday’s protest by the Haitian National Police followed the departure from office of Haiti’s last remaining Senators and represents a further decline in the functioning and stability of the Haitian Government.”

Last evening, Prime Minister and Minister of Finance the Hon. Philip Davis ordered an immediate involuntary departure from Haiti of all Bahamian diplomatic personnel as soon as security conditions permit.

The Bahamas maintains a strict regulatory framework for the review and processing of all immigration applications.  This process requires each applicant to produce various reports and certifications from their home countries. A key report is a character certificate from local police authorities to confirm any criminal history of an applicant.

Additionally, in many instances, the Department of Immigration may require applicants to attend the Bahamian Embassy or Consulate in the applicant’s home country when immigration officials require enhanced verification.

In response to yesterday’s events, the Department of Immigration hereby advises the public of changes to its policies concerning the acceptance and processing of applications for Work Permits and Permits to Reside from the Republic of Haiti.

Haiti Crisis and Its Impact on The Bahamas

Haiti Crisis and Its Impact on The Bahamas Relationship 

Bahamian Diplomats extracted from Haiti

Statement from The Bahamas Ministry of Foreign Affairs

January 27, 2023 -The ministry is able to confirm that this morning all seven Bahamian diplomats, including the spouse of the Chargè d"affaires were airlifted out of Port au Prince by helicopter and have landed safely in the Dominican Republic.

The prime minister has expressed his deep gratitude and highest consideration to the President of the Dominican Republic Luis Abinadar and the Foreign Minister of the Dominican Republic Roberto Alvarez for the execution of this process.

The diplomats are likely to proceed home shortly.

Persons entering or remaining in The Bahamas outside our laws will be returned to their home countries

The Increase of Migrant Interceptions in Bahamian Waters

The Bahamas Government continues to work assiduously and continually to address the irregular migration problem through its law enforcement agencies and international partners 

Nassau, The Bahamas - 22nd January 2023 - Earlier today, Immigration officials were notified that a vessel carrying 396 unlawful entrants from the Republic of Haiti was intercepted in the vicinity of Cay Sal by the United States Coastguard. 

The Ministry of Health’s surveillance team has been notified and the customary screenings will be conducted. 

In anticipation of an increase in migrant interceptions, last month the Department of Immigration in collaboration with the Royal Bahamas Defence Force completed work on a temporary processing and detention facility in Inagua.  This facility can temporarily house in excess of 800 persons. 

The intercepted migrants are presently en route to Inagua where they will be handed over to Defence Force and Immigration personnel.  Additional officers and supplies will be provided by HMBS Lawrence Major which was dispatched from the Defence Force Coral Harbour Base this afternoon. 

Through its law enforcement agencies and international partners, The Bahamas Government continues to work assiduously and continually to address the irregular migration problem.  The Department of Immigration is working with the Ministry of Foreign Affairs to ensure that the intercepted migrants are repatriated as quickly as possible. 

The Bahamas maintains an organised system to allow for the lawful entry and orderly processing of applications for lawful entry into The Bahamas.  This is the only process by which persons should enter The Bahamas.  Persons entering or remaining in The Bahamas outside our laws will be returned to their home countries. 

A further update will be provided to the public as soon as more details become available. 

 

Source