The Inter-American Development Bank (IDB) is the latest organisation to call into question the viability of The Bahamas National Insurance Pension Scheme and is suggesting that the tax rates need to increase from the combined employee/employer rate of 9.8 percent to 20.3 percent to sustain it. Read more in Tribune Business here…

The NIB's own actuarial studies – the last one was released March 27, 2009 for the year ended December 31, 2006 – suggest the fund is weakening and will run out of money if serious corrective steps are not taken. Find out more at NIB here…

I laugh to myself when government officials say how much good they have done with the NIB fund, and while many people have been helped, many more will be paying the costs in the future either with dramatic tax rates or reduced benefits. It all just confirms the adage that it is easy to help someone with other people's money. In this case tax dollars. The fact is the NIB fund is slowly being depleted for political expediency. 

NIB as it is currently structured is no more than a state sponsored Ponzi Scheme and is in drastic need of change.

One idea, that is not new, is to allow people to pay NIB taxes into a private pension fund and/or restructure NIB so taxes paid in are held in an account for the contributor. Of course that means government would have to somehow fund current pensioners to make up the glaring shortfall.

There are no easy answers because the ball keeps getting punted to the next generation but one thing is certain, NIB funds should not be used to fund government projects and bailouts as we've seen in the past.

What has been done with the NIB fund by the state is no different than they do by delaying tax increases to pay for deficits and day to day expenses today by borrowing more and more. As has been noted before today's political class might be dead and gone when future generations are shafted by the fiscal irresponsibility of the past 30 – 40 years.