Senior Reporter
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Economist Dr Vaalmikki Arjoon has warned that simply increasing contributions will not be enough to sustain the National Insurance Fund, calling for broader reforms such as gradually raising the retirement age to reflect longer life expectancy.
Arjoon also recommended increasing the fund’s investment allocation to international markets to strengthen its long-term viability.
“A higher allocation to global markets could increase fund value over time, as international equities may bring stronger returns than domestic assets, particularly given deeper liquidity, broader sector exposure—like technology, healthcare, AI—and stronger long-term growth trends in developed markets,” he explained.
His comments came following the presentation of the 2025 corporate annual report on the operations of the National Insurance Board (NIB) of Trinidad and Tobago in Parliament on Friday.
Arjoon noted that the report highlights prolonged annual shortfalls since 2021, with benefits consistently exceeding contributions despite an increase in contributions from $4.5 billion in 2021 to $5.0 billion in 2025. While this justified the recent rate increase, he said it underscores the urgent need for broader reforms to secure the fund’s sustainability.
In 2025, total benefit payments reached $6.63 billion, up from $6.50 billion in 2024 and $5.54 billion in 2021.
“This means that in 2025 contributions fell short of benefit payments by approximately $1.63 billion. Importantly, this is not a one-off occurrence. The system has recorded annual shortfalls every year from 2021 to 2025, with a total shortfall of roughly $6.96 billion over this period.
“Over the past five years, nearly $7 billion more was paid in benefits than collected in contributions, requiring reliance on investment assets to cover the gap. In fact, since 2013, the cumulative shortfall has reached about $9.18 billion, with most of that occurring in the last five years,” Arjoon said.
He stressed that this structural imbalance highlights the importance of reforms and the justification for increasing contribution rates. “Gradual contribution adjustments introduced years ago could have reduced the need for an increase of this extent, underscoring the importance of timely policy action to safeguard the fund’s sustainability,” he added.
Arjoon also attributed the consistent shortfalls to an ageing population, with more people retiring and drawing pensions while the growth in active contributors remains comparatively slower. He noted that long-term beneficiaries rose to over 207,000 people in 2025, a 5.8 per cent increase since 2023.
“This directly feeds into rising benefit payments, particularly retirement pensions, which now account for the largest share of long-term benefits paid—approximately $5.41 billion. This reflects demographic pressure: as more persons retire and live longer, pension payments increase. In simple terms, the system is maturing, and more people are drawing pensions relative to those contributing,” Arjoon stated.
