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Finance Minister unveils the measures of the 2026 national budget in Parliament on October 13. From left, are Housing Minister David Lee, Energy Minister Dr Roodal Moonilal, Works and Infrastructure Minister Jerlean John, Prime Minister Kamla Persad-Bissessar and Public Utilities Minister Barry Padarath. – Photo by Faith Ayoung
THE NATIONAL Insurance Scheme (NIS) is set for major reforms, Finance Minister Davendranath Tancoo has announced.
Without decisive action, he warned, the fund would collapse within the next decade — leaving hundreds of thousands of retirees without income protection.
During his 2026 national budget presentation in Parliament on October 13, Tancoo announced a phased increase in contribution rates and a gradual rise in the retirement age from 60 to 65 over the next ten years.
He said the measures, though difficult, are necessary to secure the NIS for “today’s workers and tomorrow’s retirees.”
“To save this critical institution from bankruptcy and preserve the benefits for future generations, we must increase the contribution rate,” Tancoo said.
Effective January 5, 2026, contribution rates will increase by three per cent, with another three per cent rise to follow on January 4, 2027.
Beginning in January 2028, the retirement age for receiving a full NIS pension will increase by one year every two years until it reaches 65 in 2036.
He cushioned the announcement, revealing that those retiring at age 60 before January 1, 2028, and all existing pensioners, will not be affected.
Early retirees, he added, will still qualify for reduced pensions. The minimum is $3,000.
“These reforms are not easy, but they are now urgently required given the years of inaction that allowed these challenges to deepen under the last administration,” Tancoo said.
He noted that the annual NIS benefit payments now exceed $6 billion — a rise of more than 65 per cent over two decades.
Since 2020, payouts have consistently outstripped contributions, he said, forcing the National Insurance Board (NIB) to liquidate assets to meet obligations.
The 11th Actuarial Review projected that if nothing were done, the fund would be depleted by 2033 or 2034.
Tancoo accused the previous PNM government of ignoring repeated warnings and “kicking the proverbial can down the road.”
“For nearly a decade, the PNM sat idly by while the warning bells sounded,” he said.
“We will not allow the Fund to collapse, jeopardising the very benefits that over 200,000 of our most vulnerable citizens depend on.”
The warning reflects concerns first raised under former finance minister Colm Imbert, who repeatedly cited the NIB’s dwindling contributions but did not advance legislation to increase rates or raise the pensionable age.
The NIB’s 10th Actuarial Review in 2019 had already projected fund exhaustion by 2036 if reforms were delayed.
Tancoo said his government’s approach marks a sharp turn from that inaction.
“Let it be said that under this government, the NIS will not be allowed to fail,” he said.
And as for private pensions, Tancoo said, as promised these would be exempt from income tax from January 1.