Editorial | Ideas for NIS campaign

The planned study by the island’s pension industry on how prepared Jamaicans are to face retirement will probably produce plenty of data of value to policymakers, even if most people feel they know, by gut instinct, what it will conclude: that most Jamaicans will not have the resources to face old age.

The anecdotal evidence supports that assumption, given the low proportion of the workforce that is covered by either private pension plans or the Government’s National Insurance Scheme (NIS). Which, of course, is not an argument against empirical analyses that get into the weeds of the subject.

But neither should the survey for the Pension Industry Association of Jamaica (PIAJ) be a hindrance to the Government acting on an old suggestion by this newspaper: that it embark on an aggressive and innovative campaign to pull working-age Jamaicans into the NIS net, thus providing it with more cash to fund its immediate and ongoing obligations. The serious work to be done here, apart from designing the campaign and the time-and-motion effort of enrollment, is the actuarial analysis by the NIS of the cost of success.

REQUIRED TO CONTRIBUTE

Under the law, every working Jamaican between the ages of 18 and 70 is required to contribute to the State’s pension fund, the NIS. But, according to statistics from the ministry with responsibility for labour and social security, only around 530,000 people are enrolled in the scheme, approximately 38 per cent of the labour force. That, on its face, is an improvement of around half a percentage point from the end of 2025, but a potentially misleading statistic, given the near-1.7 per cent decline in the workforce between the first and second quarters of this year.

At the same time, the Financial Services Commission (FSC), which regulates private pension schemes and superannuation funds, reported in its March analysis of the sector that only 12.76 per cent of the workforce (approximately 177,000 people) were covered by these plans.

It is reasonable to assume that people who are in private plans are, for the most part, NIS contributors. Another plausible interpretation of these statistics is that between 62 and 63 per cent of Jamaica’s workforce has no formal pension coverage, whether by private schemes or the NIS, although the latter is a statutory obligation. This is a crisis that will loom even larger over the next two decades as Jamaica’s population rapidly greys. By 2050, the island will have more people over 65 than those aged 14 or younger. The need for an expanded social safety net will be inescapable.

URGENT CAMPAIGN

It is in this context that, in addition to whatever is eventually proposed by the private pension funds, The Gleaner’s Editorial Board calls for an urgent join-the-NIS campaign, one that makes the scheme easily accessible in an economy with a high level of informality. This would involve meeting people on their own territory, providing them with incentives, but with safeguards to protect the integrity of the scheme and taxpayers’ money.

For instance, NIS canvassers would sign up self-employed and informal workers where they operate, in barbershops, beauty salons, bars, markets, and so on.

Additionally, the labour and social security ministry could, with soft hands, use the Government’s leverage over organisations whose constituents do business with the State to pull their members under the NIS umbrella. NIS enrollment and up-to-date payments could, for example, be prerequisites for obtaining route taxi or other PPV operating licences. The same arrangement might be applied to farmers who sign up for extension services from the Rural Agricultural Development Authority. Handling these enrollments in bulk through an association would be far more efficient than seeking to chase down individual people.

The Government can also explore creative partnerships with the ‘employers’ of people who work informally via digital platforms.

FLEXIBLE PAYMENTS

The system for self-employed people to make their NIS contributions could be made more flexible. They might lodge lump-sum amounts or make monthly, weekly, or even daily payments. Rather than the existing cumbersome, bureaucratic, paper-based mechanism, contributors could have the option of using mobile apps that give them real-time access to their records and enable them to make payments. In other words, the system can borrow from the approach of telecoms companies with their pay-as-you-go telephone and data-credit arrangements.

On the incentive side, current pensioners receive high-value NIS Gold health insurance cards. These provide a significant cushion against healthcare bills.

A lower-value, scaled-down version of that card can be offered to new signees, to whom an NIS pension four decades or half a century down the road may not be an enticement to enroll. The immediate value of the health card is more likely to be. The card can be designed with inbuilt breakers to shut down benefits to people who fail to pay their contributions after a specified grace period, say 30 days.

The value of the cash inflows from the new signees to finance existing pensioners is likely to offset any cost of the benefits they would receive from the health card.