Barbados’ Rising Pensions a Problem

  • To reduce the risk that the Barbadian government will be forced to bail out the National Insurance and Social Security Service’s (NISS) pension fund, the administration is banking on the effectiveness of three actions: boosting the working-age population, adjusting contribution rates, and strengthening governance of the fund.
  • According to the Government of Barbados’s 2025 Fiscal Risk Statement prepared by the Fiscal Risk Unit (FRU) in the Ministry of Finance, Economic Affairs and Investment, social and long-term risks including the island’s quickly ageing population, low birth rate, increasing costs to support healthcare, and the current social welfare programmes, are seen as “unsustainable”.
  • Addressing the impact of the island’s ageing population and the long-term fiscal implications, the ministry document acknowledged Barbados was “experiencing significant demographic changes”, which posed major fiscal challenges. These included a dwindling workforce and concurrent revenue decline, as well as a smaller working-age population that would support an increasing ageing population.
  • To reduce the impact on the NISSS, the government said several steps were being taken to ensure the State does not have to shore up the pensions fund, which the 17th Actuarial Review showed the NISSS liabilities exceeded its assets. However, the administration was confident that introducing policies to increase the working age population, adjusting the NISSS contribution rates, and tightening governance and management of the fund would stave off the necessity to pump money into the social security system to support rising pension demands.
  • The report noted that a life expectancy on the island of around 79.92 years in 2025, and a GDP per capita income of $22,673 in 2023, suggested overall health and wellbeing of Barbadians, as well as a “high standard of living”.  However, it warned that the population dynamics remain a challenge to the sustainability of social welfare programs and labour productivity, and that these issues demand strategic planning and ongoing policy adjustments to safeguard government resources and societal stability.

(Source: Barbados Today)