The 7th Actuarial Review

The International Labour Office (ILO) submitted the final report on Phase I of the 7th Actuarial Review of the National Insurance System (NIS) as at 30 June 2005. The conduct of the Actuarial Review was in compliance with Sections 22 (1) and 70 (1) of the National Insurance Act, Chapter 32:01.

The main objectives of the 7th Actuarial Review were to evaluate the financial status and assess the long-term financial sustainability of the NIS while maintaining an adequate level of insurance protection to the insured population and its dependents. In addition, the ILO also conducted analyses into the feasibility of modifying several NI provisions in response to requests by the Board of Directors, tri-partite stakeholders and the general public.

The senior actuary of the project, Mr. Gilles Binet, was in Trinidad for the period 11 June 2007 to 18 June 2007 to present the findings of the Actuarial Review. During his stay, Mr. Binet delivered a presentation of the draft ILO report to the Board of Directors and key stakeholders representing business and labour. In addition, the National Insurance Board of Trinidad and Tobago (NIBTT) presented NIBTT recommendations to the Honourable Prime Minister and his Finance Ministers on 09 May 2007 and to employers at a Special Presentation Meeting hosted by the Employers’ Consultative Association on 03 August 2007.

In reviewing the past performance of the NIS over the inter-valuation period 2001 to 2005, the NIS outperformed the forecasts from the 6th Actuarial Review which was conducted as at 30 June 2000. With regard to the insurable population, the actual number of contributors and beneficiaries exceeded the 6th Actuarial Review projections over the inter-valuation period.

On the revenue accounts side, contribution income, investment income and benefit expenditures exceeded projections. Administrative expenses exceeded projections in 2001/02 and 2003/04. This was attributed to settlement of salary negotiations and payment of retroactive salaries for the periods 1999-2001 and 2002-2004.

On the balance sheet side, assets grew more rapidly than forecasted and there was significant growth in the benefit funds and reserves. The ILO considers the financial situation as at 30 June 2005 to be at least equivalent to the forecasts from the 6th Actuarial Review and has therefore concluded that the NIS is operating on a sound financial basis.

From a demographic perspective, the projections assume low birth rates, an increasing life expectancy that takes the HIV/AIDS pandemic into account and zero net migration rates. From an economic standpoint, the projections reflect a burst of short-term economic growth followed by a favourable long-term economic outlook.

Population projections conducted by the actuaries reveal that while the size of the general population is expected to increase by around 11% by 2055, the number of pension-age persons will practically triple, the number of children will significantly decrease by around 21% and the number of workers will decline by around 10%. These main findings significantly emphasize the Ageing Population Syndrome.

The NIS demographic (i.e., contributors and beneficiaries) projections conducted by the actuaries reveal that -

  • the number of pensioners will continue to grow rapidly relative to the number of contributors,

  • lifetime pensions will be payable over longer periods of time, and the pensioner support ratio is projected to move from about four (4) contributors per pensioner in 2006 to about one (1) contributor per pensioner by 2055. These main findings tell us that the NIS is still maturing.

Stakeholders’ proposals on improvements to current NIS provisions were taken into consideration in order to analyze the financial impact on the NIS, as well as, to assess the long-term financial sustainability of the NIS as a result of these proposals and funding requirements. Based on the actuaries’ analyses, the key recommendations are (among other things) -

  • To increase the minimum monthly retirement pension from $1,000.00 to $2,000.00 and to implement a slow and gradual increase in the contribution rate over a five (5) year period as shown in the table below.

Date of Recommended NIS Contribution Rate Increase

NIS Contribution Rate (%)

January 01, 2006


07 January 2008


04 January 2010


02 January 2012


(45% increase in all benefits rates)



Actuarial Review Recommendations