- Pensions in payment and fixed-rate benefits (except the minimum retirement
pension) should be increased by 52.3 percent in January 2013 to reflect the
increase of the CPI since the last actuarial review (Appendix 6 presents the
recommended benefit rates). At the same time, the maximum insurable earnings
should be increased to TT$11,800.
- From January 2014, all system’s parameters should be subject to an
automatic annual adjustment. Pensions in payment and fixed-rate benefits should
be adjusted based on the evolution of the CPI and the maximum insurable earnings
should be adjusted according to a wage index.
- The total contribution rate for salaried workers should be increased to 12.0 percent for the period January 2013 to December 2017. Contribution income should be allocated to the three benefit funds according to the following proportions:
- The pay-as-you-go cost rate at the end of the projection period in 2060 is
considered unsustainable at 30 per cent of insurable earnings. It is recommended
to adopt reforms, either by way of increasing contribution income and/or
reducing benefit promises, in order to ensure the long-term financial
sustainability of the NIS. Particular consideration should be given to the
development of a strategy for gradually increasing the contribution rate over
the next three decades whilst favouring the gradual increase of the retirement
- Reserve objectives to be maintained for each fund should continue to be established as follows:
- Long-term: the remaining excess of income over expenditure
- The present earnings class system should be converted into a career average re-valued earnings system. The report presents three possible formulas for such a conversion and indicates a series of criteria that should be considered for their evaluation. It is recommended that the various stakeholders be consulted on those options and the suggested criteria before deciding on the most appropriate option.
- Conditional to the conversion of the present earnings class system into a
system based on a percentage of earnings the number of weeks of contributions required for eligibility to the retirement
pension could be reduced from 750 to 260. However, for persons having paid
contributions for less than 750 weeks, the minimum pension should be prorated.
- The contribution rate for the SEP fund should be established at 11.2 percent (10.7 percent for Long-term benefits and 0.5 percent for Short-term benefits) Age credits for eligibility purposes should be granted at a rate of 50 contribution weeks for each complete year elapsed between the age of 50 and the attained age of the person at the introduction of these measures (up to a maximum of 6 years of credit). The government should consider the possibility to support (through a direct subsidy) part of the contributions of low-income SEP.
- The maximum duration of maternity benefits should be increased from 13 to
- The Ministry of Finance and the Ministry of Labour should jointly
investigate the extent of the dual compensation for work injuries (Employment
injury benefits paid by the NIS and the compensation offered under the WC Act).
In addition, the NIB should undertake, in collaboration with the Ministry of
Labour, the measurement of the adequacy of compensation offered to injured
workers by the existing systems of compensation, particularly for persons with a
permanent loss of earning capacity.
- Before permitting new optional contributions in a new National Insurance
Plan, it would be necessary to study the investment instruments already offered
by the private sector and the level of their management fees.
- Closer links should be established between the Investment Policy Statement and the actuarial review in order to adequately
reflect the time-horizon of the system in the determination of the NIBTT asset
allocation (taken into account in a new Investment Policy Statement dated June 2012). In addition, the
NIBTT should continue its representations for an increase of the limit presently
imposed on overseas investments.
- Administrative expenditures of the NIBTT should be allocated by branch
according to contribution income and benefit expenditure in equal proportions,
until a more accurate system can be developed.
- Long-term fund: 89 per cent
- Short-term fund: 6 per cent
- Employment injury fund: 5 per cent
- Short-term: 2 times the annual benefit expenditure
- Employment injury: 10 times the annual benefit expenditure
- Minimum survivors’ benefits should be increased as follows:
- Child: $600
- Dependent parent (if both are alive): TT$300 each
- Dependent parents (if only one is alive): TT$600
- Orphan: $1,200