Dear Editor,
I write to raise concerns about the government’s recent decision to make one-off payments — ranging from $260,000 to $650,000 — to senior citizens who reached age 60 but fell short of the 750 contributions required for an NIS Old Age Pension. While the human intent behind this measure is understandable, I believe it quietly undermines the actuarial foundation on which the National Insurance Scheme is built, and deserves closer scrutiny than it has received.
The NIS is not a welfare programme. It is a contributory social insurance scheme, funded by workers and employers who pay in over years on the understanding that benefits are earned, not granted. The 750-contribution threshold for a pension exists for a reason: it reflects the minimum period of sustained contribution needed for the pension fund to remain solvent while paying out. Every benefit level, every premium rate, and every actuarial projection made for the Scheme rests on the assumption that this rule will hold.
By awarding cash payments — funded by a $10 billion government transfer — to people who did not meet that threshold, the government has, in effect, granted pension-like relief outside the pension rules. This is a policy choice with real consequences:
1. It sets a precedent. Once contribution minimums can be waived by decree for one cohort, it becomes politically difficult to deny similar relief to the next cohort that falls short, whatever the actuarial advice says.
2. It blurs the line between NIS and general social assistance. Guyana already has a non-contributory Old Age Pension for those 65 and older, funded through general taxation, specifically to catch people outside the contributory system. If contribution shortfalls are now to be remedied with lump-sum payouts as well, the distinction between “earned” and “unearned” benefits collapses, and taxpayers absorb costs that contributors were meant to fund through their own premiums.
3. It rewards the symptom rather than fixing the cause. Many of the affected retirees fell short of 750 contributions because employers failed to remit deductions on their behalf — a compliance and enforcement failure, not a flaw in the contribution requirement itself. A one-off payment does not recover the stolen contributions, does not penalise the delinquent employers, and does not fix the enforcement gaps that created the problem in the first place. It simply asks the general taxpayer, rather than the negligent employer, to foot the bill.
None of this is to say that the more than 25,000 pensioners affected do not deserve relief — many were genuinely failed by employers who never remitted the deductions taken from their pay. But the fix for that failure should be employer accountability and stronger compliance enforcement, not an ad hoc cash payment that treats the Scheme’s actuarial rules as negotiable. If the government believes 750 contributions is the wrong threshold, that is a conversation for the NIS Board and its actuaries to have transparently, with the necessary premium or benefit adjustments made to keep the fund solvent — not a decision announced as a one-off political gesture.
Guyana’s oil wealth gives the state room today to backfill gaps like this. But NIS was designed to outlast any single budget cycle. If every shortfall in contributions becomes an occasion for a government payout, we should ask plainly: what is left of the insurance principle the Scheme was built on?
Sincerely,
Keith Bernard
Discussion