St Vincent Finance Minister Camilo Gonsalves said the NIS’ finances improved somewhat in the first quarter of 2023. Net losses were reduced from $10.7m to $1.07m. The improved financial performance was attributed to an increase in contribution income, stronger investment performance, slower growth in benefits and reduced administration costs.
Gonsalves said contribution income for the first quarter of 2023 rose from $14.4 million to $16.1 million relative to the year-ago-quarter on the back of strong private sector growth, led by increases in construction (7%), transport and storage (7%), accommodation (5%), wholesale and retail (5%) and manufacturing (5%).
“Investment income rose from $600,000 to $4.5 million, largely due to the partial recovery of the international equity sub-portfolio from -$3.3m to $0.7m. However, further, cost containment measures reduced administrative expenses from $3.1 million to $2.7 million. Currently, the asset class diversity remains roughly the same as the first quarter of 2022, with 28% in Cash; 24% in bonds; 9% in Loans; 25% in Equities; and 14% in real estate”.
Gonsalves stated that NIS exposure to the Central Government is only 11%, well below the prudential limits.
“This is also a reduction from the 13% recorded in the 11th Actuarial Review. This limited exposure to the central Government is a stubbornly inconvenient truth for those seeking to craft a false narrative about the Government raiding NIS coffers. It is simply not true. Nonetheless, despite improving finances relative to the height of the COVID pandemic, the Actuarial Review is correct in its assessment that improved investment performance cannot outweigh the drag caused by changing demographics and generous design.
