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Foreigners Can Get Pension After Three Years
Kendeno
N. Knowles, The Bahama Journal
June 3, 2010
Bahamas
A senior National Insurance Board (NIB) official has revealed that foreigners who work here in The Bahamas for merely three years are actually eligible to receive a pension once they reach retirement age even if they leave the country to return to their homeland.
However, NIB Director Algernon Cargill said the Board is now working to reverse this trend.
NIB’s Eighth Actuary Report highlighted a number of things that NIB has to do if it wants to ensure that the fund remains viable, sustainable and solvent.
Mr. Cargill says NIB is now considering increasing the time it takes for workers – particularly foreigners – to claim pension benefits.
“Currently a person can receive a pension from working in The Bahamas for three years only and this is perhaps the lowest rate anywhere in the world,” Mr. Cargill said.
“Our recommendations are to move the vesting period from three years to 10 years. At this point any employee that works for three years can receive pension at the retirement age.”
To put things into perspective, Mr. Cargill explained that a foreign teacher or doctor who may have worked in The Bahamas for three years or more can return home, become employed, and claim the pension benefits offered in their homeland in addition to the pension from NIB.
This would mean that more money would be leaving the fund and by extension the county.
But in order to keep abreast with other social security funds around the world, Mr. Cargill said the recommendations put forward to the NIB must be implemented immediately.
“We will work diligently to implement these measures along with several other reform measures to the National Insurance Act to ensure that the fund remains solvent as it is,” he said.
NIB’s assets are presently valued at $1.6 billion. If the fund continues to operate the way it is currently functioning, then Mr. Cargill said the fund would be left in jeopardy.
This, he said, is why it is so important that officials increase the time it takes for individuals to receive pension benefits.
“The eighth actuary review indicated that if we continue to operate NIB without making necessary reforms or we do not improve our operational efficiency, or we do not look at increasing the contribution ceiling, or if we do not look at increasing the contribution rate, and we don’t ensure that delinquent employers pay their contributions, by the year 2032 the fund would be severely challenged,” he said.
“In other words, if we continue to operate as we are, the fund could be in jeopardy. What we are doing in preparation for 2032 and the longer term future of the fund is ensuring that the fund, which currently stands at $1.6 billion in assets, remains strong and viable as it is today.
Our fund is one of the largest in the region and we are doing a great job in being excellent stewards of the fund in our opinion.”
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