NIS begins implementing final phase of 8th Actuarial Review

By Linda Straker

While weekly workers could have already experienced paying increased contributions to the National Insurance Scheme (NIS) as of January 1, 2014, monthly workers will begin paying increased contributions as of the end of the month.

The National Insurance laws make provision for an Actuarial Review of the NIS operations to be
conducted every three years. This is done by an Actuary, who primarily assesses the financial and actuarial soundness of the Fund and makes recommendations as to the adequacy of contributions payable and the relevance of benefits paid to ensure the long-term sustainability of the Fund.

Following the eighth review, the National Insurance (Collection of Contribution) Regulation was amended on October 29, 2010 (SRO 23 of 2010), resulting in increases in the ceiling on which National Insurance contributions are payable effective November 1, 2010, January 1, 2012 and January 1, 2014.

“What this mean is that effective January 1, 2014, the ceiling on which NIS contributions are payable has increased from $4 250  to $5 000 for monthly paid employees and from $990 to $1 160 for weekly paid employees,” said Mrs. Camille Gibbs-Douglas, Public Relations Officer at the NIS.

On November 1, 2010, the ceiling became $3 500; on January 1, 2012, it moved to $4 250 and the last increase as of $5 000 from January 1, 2014.

Mrs. Gibbs-Douglas explains that the contribution rate remains at 9 per cent of total insurable earnings, with employees between the ages of 16 and 60 paying 4 per cent and employers 5 per cent and under the new structure, it means that an employee who earns $5 000 monthly as of January 1, 2014 will now have to contribute $200 and the employer $250, making the total National Insurance contribution payable $450.

Employees under the age of 16 and over the age of 60 do not pay contributions, but employers have to pay a 1 per cent contribution for employment injury. “Each working person must be reg-istered and be covered for employment injury,” Gibbs-Douglas said.

Since the commencement of its operations in 1983, nine Actuarial Reviews have been conducted, resulting in a number of significant changes to the NIS reg-ulations. The Ninth Actuarial Review, which was conducted in 2011, recommended an increase in the pension from 60 to 65 over a 20-year period.

The tenth review is scheduled to take place during 2014.