Vice President Dr. Bharrat Jagdeo on Friday defended the 2006 investment of $2.5 billion made by the National Insurance Scheme (NIS) in the construction of the Berbice Bridge although the pension fund is now operating at a deficit.
During a press conference at the Office of the President, Jagdeo told reporters that already NIS has received $3.3 billion on its investment with billions more to be received in coming years.
Jagdeo was speaking days after he told residents during an outreach in Region Five that NIS was bankrupt, reaching that state under the previous APNU+AFC government.
The opposition People’s National Congress Reform (PNC/R) Executive Member Volda Lawrence responded and claimed that NIS was headed in that direction because of the 2006 investment in the bridge construction.
But according to Jagdeo, her statements were false.
“Volda read a statement but someone prepared it for her. Imagine she is [Finance Minister] Ashni Singh’s counterpart in the National Assembly. She is the chief spokesperson on financial matters, God help us,” Jagdeo said.
He pointed out that the $300 million bond has been repaid already and NIS has already received $276 million in interest.
Additionally, from the $760 million principal investment, NIS received $993 million in interest.
That makes it a combined total of $1.8 billion while $65 million has been redeemed in subordinate debt; $517 million on interest and for preference shares, NIS has received over $200 million.
There has been no payment on common shares but altogether from its investment of $2.6 billion, NIS has received a total of $3.3 billion.
“It is the highest yielding instrument. Yields more than the treasury bills they used to invest in and would not have this return,” Jagdeo said.
Jagdeo stood by his comments where he labelled NIS as being bankrupt and said it was not feasible to increase the current monthly assistance paid to beneficiaries.
“Government will and has to intervene through various provisions to ensure people receive their benefits…I can’t commit at an outreach to increases in benefits but we will make sure people don’t someday wake up and find they can’t receive their monthly benefits or medical benefits,” Jagdeo said.
He said while the government can’t commit to an increase in benefits, it can commit to curing the issues there and said beneficiaries have nothing to worry about for the next 100 years.
“There is nothing to worry about. We will cure the deficit using any other means to ensure the next 100 years, it remains viable and people receive their benefits,” the Vice President assured reporters at a press conference at the Office of the President.
Despite objections from the PNC opposition, Jagdeo said he is not wrong on NIS and provided figures to prove his case.
He said in 2015 when the APNU+AFC came to government, NIS was operating at a surplus of $900 million.
That surplus was reduced to just over $100 million by 2016 but by 2017 that changed to over $100 million in deficit.
By 2020, when the APNU+AFC left office, the deficit grew to $1.7 billion, Jagdeo said.
“So, you see we moved from operating with a surplus into a huge operating deficit.
The deficit continues to grow and currently stands at roughly $2.5 billion.
