News

News

NIB Can’t “Write Off” Employees’ Contributions

3/13/2009 12:00:00 AM

Press Release

NIB Can’t “Write Off” Employees’ Contributions



Algernon Cargill, Director of the National Insurance Board (NIB) is responding to a Tribune article (March 12, 2009) that suggested that members of the business community are in a state of “enormous consternation” over the Board’s current and ongoing process of updating its contribution records. Though NIB has addressed this issue in the recent past, the NIB Director wishes to say once again that the Board is obligated by the National Insurance Act to ensure that all employers have paid the amount of contributions due for each employee for each month, and that contributions submitted are accurately posted or deposited to the accounts of the appropriate employees.

He says, “There is no provision in the law that allows NIB to write off contributions that were outstanding for more than ten years, 20 years, or even 30 years. So, where we encounter missing periods or payments in a person’s contributions account, we are mandated by law to investigate and to resolve it. That means we either determine that there were indeed no contributions payable for the missing periods, or we determine that the employer or self-employed person actually failed to pay contributions for the periods. In the latter case, we must pursue payment. We have no other course of action available to us under the law.”

The NIB Director says that a few people seem to be having a problem grasping this concept of perpetual liability because it appears to go against conventional accounting practices or recommendations; he says that in the case of social security, the absence of a statute of limitation on arrears of contributions has universally been a vital and necessary ingredient in ensuring the financial protection of workers. Further, NIB pays out in excess of $150 million in claims annually. To continue to do this and not challenge the NIB Fund, will require us to continuously improve our collection efficiency and unfortunately. This means that employers or self employed persons who have chosen to not pay NIB contributions in the past, will be required to do so now and to settle arrears.


Says Mr. Cargill, “contributions represent one week of a person’s work life. Social Security – in this case National Insurance – must employ every tool at its disposal to ensure that every week that a person works is duly accounted for, because one contribution can mean the difference between a sick, invalid or aged worker qualifying for a benefit or being disallowed. We, therefore, have to ensure that every eligible contribution is collected and accounted for and when we are confronted with situations that present a conflict, particularly in cases where it appears that NIB’s own record keeping may not be current, we then have to make a commonsense and practical decision based on the contribution history of the employer and/or self employed person. In every case, we make the decision that benefits the employee and it is certainly not the intent to create any state of “enormous consternation.”


“But, NIB does not have the right to discount a person’s entitlement and that’s exactly what we would be doing if we were allowed to write off arrears of contributions.”

With regard to the suggestion that NIB set up a system where employees could verify their contributions, Mr. Cargill says that such a system was put in place in 1972 with the enactment of the National Insurance Act.

He says, “The National Insurance Act always provided employees the right to request from their employers proof of contributions; failing that, employees could go in to any NIB Local Office, at any time, to request an update on their contribution accounts.

“The National Insurance Board about two years ago took this even further with the establishment of the KYC (Know Your Contributions) Unit. KYC allows persons to come in and obtain, in a matter of minutes, a ‘contribution statement’ that contains the history of all their contributions.”

We at the National Insurance Board employ a common sense approach when we look at every employer. Obviously, if an employer has a missing period and has had a history of successive payments, it could be that there is an internal issue and so this and all of the facts are considered when we evaluate every case.

Cargill further states that there are no instances where contribution status letters are denied, so he cannot understand the enormous consternation referenced in the Tribune article.

“It is not NIB’s policy to intentionally delay normal business practices,” he says. “In fact, we have adopted a policy of providing a qualified letter, as well as encouraging employers to enter payment agreements to ensure that normal business activity is not interrupted.”
Comments (0) Add Comment Add Comment
Name

Comment
Captcha
Enter the code from the picture
Farewell to Former Director Sonia Gill
Farewell to Former Director Sonia Gill
Board Member Lisa Turnquest Inducted to Grand Bahama Chamber of Commerce
Board Member Lisa Turnquest Inducted to Grand Bahama Chamber of Commerce
BIM Contribution Rates Increase Media Schedule
NIB's media schedule to discuss the contribution rates increase; March 18th, 19th, and 20th......
National Insurance Board Blood Drive
In partnership with Doctors Hospital Health System and the Public Hospitals Authority, the National Insurance Board........
NIB/Public Hospitals Authority Blood Drive in Freeport
As a part of NIB’s 2nd event in our Road to 50 Holistically Balanced Series, NIB partnered with the Public Hospitals Authority to host a blood drive in Freeport, Grand Bahama at NIB’s Freeport Local Offic
NIB / Doctors Hospital Host Successful Blood Drive in New Providence
A big thank you to everyone who turned out and generously donated blood at NIB 50th Anniversary Blood Drive.....