Incoming Rate Increase to Shrink NIB Deficit by $27Mn

• A National Insurance Board of the Bahamas (NIB) executive revealed that NIB’s deficit this year would shrink by $27Mn due to the forthcoming rate increase set to take effect on July 1.
• The increases scheduled for July 1, 2024, will raise employer and employee contributions by 0.75 percentage points each. The employer contribution will climb to 6.65% from the existing 5.9%, while that for employees will increase from 3.9% to 4.65%.
• The contribution rates for self-employed and voluntarily insured individuals will also rise from the current 8.8% and 5%, respectively, to 10.3% and 6.5%.
• This adjustment forms part of a strategy to ensure the long-term survival of The Bahamas’ national social security system, meeting its benefit obligations to all citizens and legitimate persons who qualify for assistance.
• Dr Francis noted that, currently, NIB holds $1.4Bn in reserves. She highlighted that these reserves were pivotal during events such as Hurricane Dorian and the pandemic, enabling NIB to provide significant assistance during 2019 and 2020.
• Overall, the increase in NIB rates will have the effect of ensuring the medium-term viability of the social programs, thereby providing some level of relief to the Bahamian government by reducing the likely levels of expenditure which would have been spent if the NIB’s reserves were to exhaust in 2028 as previously predicted.

(Sources: Eyewitness News & NCBCM Research)