{"id":178802,"date":"2025-09-29T23:47:15","date_gmt":"2025-09-29T23:47:15","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/178802\/"},"modified":"2025-09-29T23:47:15","modified_gmt":"2025-09-29T23:47:15","slug":"the-nis-challenge-trinidad-and-tobago-newsday","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/178802\/","title":{"rendered":"The NIS challenge – Trinidad and Tobago Newsday"},"content":{"rendered":"

\tEditorial<\/a><\/p>\n

\t
\n\t\tNewsday
\n\t<\/a><\/p>\n

19 Hrs Ago<\/p>\n

\"MinisterMinister of Finance Davendranath Tancoo – FILE PHOTO<\/p>\n

The math does not favour the continued existence of the National Insurance Scheme.<\/p>\n

Warnings about the increasingly dire imbalance between contributors and claimants qualifying for pensions under NIS have been public knowledge for two decades now. It’s an inexorable actuarial calculation.<\/p>\n

As the population ages, the number of workers contributing to the system has shrunk considerably.<\/p>\n

While the country has championed small business and micro-entrepreneurship, the doors to contributing to the NIS have remained firmly shut for most of the self-employed and that has widened the gap between contributors and retirees drawing on the fund.<\/p>\n

That imbalance threatens collapse in as little as eight years without significant intervention and retooling of the fund.<\/p>\n

This demographic issue challenges pension plans globally.<\/p>\n

In 2021, retired TSTT workers protested outside the company’s Port of Spain headquarters calling for a single consolidated plan to improve conditions for retirees from TSTT’s predecessor company, Telco.<\/p>\n

That pension issue was finally sorted out on September 23. It took five years to make sense of a pension plan that serves just 2,500 pensioners.<\/p>\n

The US is about to close a loophole exploited by the wealthy in its 401(k) retirement plans that allowed anyone to make pre-tax contributions to their pension plan. These “catchup contributions” were accessible to workers over 50, likely to be earning more and able to beef up their benefits as they approached retirement.<\/p>\n

The option was widely abused by high earners who stashed millions in pre-tax retirement benefits into their 401(k) plans, most notably billionaire Peter Thiel, an activist against taxation, who stuffed an untaxed US$5 billion into his retirement plan.<\/p>\n

The US is facing its own pension crisis, with estimates of underfunding ranging between US$1-3 trillion required to keep state pension plans solvent.<\/p>\n

Globally, the support ratio, workers contributing to government pension plans compared to retirees drawing down on these plans has been dropping.<\/p>\n

Pension plans are increased through conservative investment of the money contributed, but careful investment yields low returns.<\/p>\n

The key to a viable government pension plan is the support ratio.<\/p>\n

The 11th Actuarial Report on the National Insurance Board noted a 3.2 per cent decline in contributors and a one per cent increase in claimants.<\/p>\n

The Finance Minister promised that the budget will address the issue decisively, but options are limited.<\/p>\n

Retirees can claim their full government pension at age 60 if they meet the minimum number of contributions.<\/p>\n

Raising the age of claim eligibility to 65 is one possibility, another is to increase the size of individual contributions, but the most sensible option is to create a regime that allows self-employed workers to contribute.<\/p>\n

That option is likely to create a short-term hit on the fund but make it more viable for the long-term \u2013 the entire point of a pension plan.<\/p>\n","protected":false},"excerpt":{"rendered":"Editorial Newsday 19 Hrs Ago Minister of Finance Davendranath Tancoo – FILE PHOTO The math does not favour…\n","protected":false},"author":2,"featured_media":178803,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[45,49,48,133,131,132],"class_list":{"0":"post-178802","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-finance","12":"tag-personal-finance","13":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/178802","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=178802"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/178802\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/178803"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=178802"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=178802"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=178802"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}