Berbice Bridge owes NIS $810 million in investment income

The National Insurance Scheme (NIS) is owed $810 million by the Berbice Bridge company on accumulated interest from its investment in the bridge, chairman of the NIS John Seeram said Wednesday as the Scheme faced “huge uncertainty with regards to financial sustainability.”

The investment in the Berbice Bridge forms part of a giant investment portfolio the Scheme has, but a portfolio from which it is getting little return. Seeram said the NIS was in talks with the Bridge company to get the outstanding payment.

Seeram, speaking at a NIS event Wednesday said that at the end of 2018, the NIS had an asset portfolio of $34 billion, 87% or $29 billion of which represented its investments.

“The income returned on investments in 2017 was 3.7% and it declined in 2018 to 3.2%,” he stated.

“This decline and magnitude indicate that this entire portfolio needs to be addressed with a view to obtaining more lucrative returns,” Seeram stated.

He said the board has approved the hiring of consultant in coming months to deal with these matters. The NIS, he said is looking to invest its money where it can get a lucrative return in the interest of keeping the Scheme going since its net profit has been on the decline.

Seeram state: “(NIS) investment portfolio has not been earning the rates of returns on some of its bonds and shares in keeping with global returns.

“We will need to consider purchasing more attractive bonds and shares which are traded on the global stock markets such as NY, London Japan, Hong Kong, as against renewing the terms of the securities.”

The NIS is currently celebrating its 50^th anniversary.

He said that with prompt and highly accurate financial information available, both the Board of Director and the Executive Management have been assessing where the NIS’s financial viability is.

Seeram said maintaining financial sustainability is now a priority issue and the NIS has identified two major income areas.

He pointed out that NIS is relooking at its income portfolio with a view to collecting its arrears contributions, some of which are long outstanding from employees, employers and self-employed.

Those who owe the NIS include the government through various public entities.

During 2018, a debt management issue was established and is now fully staffed.

“This department is now tasked with collecting arrears which is vital to the financial sustainability of the NIS,” Seeram stated.