A major re-visioning of Social Security and initiatives towards Social Well-Being are essential for the Turks and Caicos Islands. 

 

We would like to present five core concepts that can serve to help rebuild these functions that represent almost $100 million dollars worth of activity per year. [Health Care - $60 million, Pensions & Insurance - $30 million, Higher Education – circa $5 to $10 million]

 

Present experience shows us conclusively that the management of not one of the listed areas above has been appropriate.  Let us look at the details of each separately first.

 

Current Status

 

NIB

The current state of the National Insurance Board, NIB, can be described simply as a royal mess.

 

Corrupt management from the Misick era were left in their positions for years into the interim administration.  Even today Ervine Quelch remains inexplicably as Chairman creating mischief to no end. 

 

NIB’s involvement in the TCI Bank will lead to $14 to $17 million (or greater) of losses of the public’s pension funds as well as having been a (if not “the”) major contributing factor to the additional loss of $50 million in other depositors’ funds.

 

NIB’s refusal to release an inventory of its assets (our assets!) and attempts to prevent the auditor from viewing its records has been nothing less than scandalous and jaw-dropping in their audacity.

 

We were initially hopeful with the selection of Colin Heartwell as CEO but are perplexed as to why now into the fifth month since he assumed his position, he has not taken the initiative to release an inventory of the NIB’s assets and shed light on past actions?

 

As the recent Tri-Annual Actuarial Report on the NIB stated, as currently structured, the NIB will not be able to fulfill its obligations in the decades to come. 

 

 

NHIB/P

 

The current state of the National Health Insurance Board and Plan, NHIB/P, can also be described simply as a royal mess.

 

Born out of a massively corrupt hospitals construction contract, and suckled through the corrupt and incompetent installation of John T. Smith, Brian Hogan as management and overseen by a British advisor decidedly over his head, Keith Bellamy, the NHIB has gone from crisis to crisis.

 

Brian Hogan has been fired.  Keith Bellamy returned to the U.K., and again as with Ervine Quelch at the NIB, inexplicably John T. Smith remains as Chairman of the NHIB/P.

 

We have yet to see an audit of the last two years of operations. 

 

We have yet to hear about the results of the investigation (or cover-up) into the millions of debt improperly taken on by the NHIP with the Broward Health Care System and with the entire Redbridge Networks contract.

 

“Regionalization” of health services has been nothing but a euphemism for lowering the quality of care because of the financial difficulties at the NHIB.

 

Premiums being paid by citizens and residents have been increased by 20% and ad-hoc changes to policy have had to be reversed when found to be illegal and immoral.

 

In summary, a royal mess!

 

 

Higher Education

 

During the last elected government, scholarships were essentially a form of patronage.  Whether asking for votes or for sexual favours, Michael Misick was not hesitant in clearly stating a quid pro quo when granting scholarships.

 

As reported recently only a handful (one hand) of students that were granted scholarships during this period have been able to maintain grades appropriate for scholarships.

 

The best we can do now is draw a curtain on the corruption of the years 2003-2009 and begin from first principles in defining a strategy for the funding of higher education for the youth of the TCI.

 

The recent report on scholarships is a good start [posted on the Journal… Nov. 11, 2011 - TCIG - Public Feedback Sought on New Scholarship Policy Full Story].

 

Via private or public funds, whether vocational or academic, higher education is an essential part in creating a viable society.  The funding of higher education needs to be considered as an integral component of any national savings planning.

 

 

A New Vision & Structure

 

Let us not try and attempt to patch-up what is clearly dysfunctional and broken.  However, we are not sure if the skill sets are present, British or Local, to shift to a better organizational structure all at once.  Therefore we may have to be content with steady evolution instead of the necessary revolution.

 

The other KEY point we feel we need to internalize is that we (the TCI) do not have an over abundance of sufficiently literate financial experts to manage three or four separate government entities each managing millions of dollars.  It would be best to focus all our talent, and all our OVERSIGHT and “trip-wires” onto one agency.

 

===

 

Combine the functions of the NIB, NHIB along with oversight of a National Heritage Trust Fund and Scholarship Savings Plan into one rock solid entity with glaringly bright spot lights of oversight placed upon it.  A working name can be “Social Security Agency or National Savings & Investments Agency”.

 

Five core principles of such an entity:

 

1.   Oversight

 

a.    When we are dealing with hundreds of millions of dollars, the level of oversight and accountability has to be greater than the Mickey-Mouse operations that we have seen in recent years at the NIB & NHIB.

 

b.    The Governor, CEO, CFO and at least one Elected Representative MUST sit on the Board of this entity along with knowledgeable independent, courageous board members.

 

c.    Clear quarterly as well as provisional monthly financial statements and key metrics MUST be published for all to see.

 

d.   Strict rules enforceable in the criminal courts if management or board members act against or outside their fiduciary responsibilities.

 

 

2.   Premium Collection & Monitoring

 

a.    Combining premium collecting will save $2 - $3 million in reference to what is now being spent by the two separate entities, NIB & NHIB, on performing these function

 

b.    Help prevent the problems that have occurred with employers not complying with regulation, by allowing individuals to access information about their individual accounts and status online.

 

 

3.   National Trust Fund

 

a.    Crown land is a national asset.  Any income received from any crown land sales should go into a National Heritage Trust Fund for the benefit of all TCIslanders and all future generations, not just those alive now. 

 

b.    No principle should be used from this fund; only investment income can be allocated to meet shortfalls for pensions and or for other allocations within Social Security.

 

 

4.   Funding Higher Education

 

a.   There will never be enough scholarship funds from government general revenues to meet the demands of higher education for a modern society.  It is essential that private savings be mobilized to fund higher education. 

 

b.    One example of the type of program that could help solve this problem:

 

                                         i.    Create an Education Savings Account, ESA, upon the birth of any TCI child or upon any underage person gaining citizenship

 

                                        ii.    Any deposits to the savings account will be matched by the government up to a maximum of $1,000 per year.

 

                                       iii.    Education Savings Account would yield returns of 4% a year, or equal to the cost of government borrowing; whichever is greater.

 

                                      iv.    Supplement ESAs with a College loans program, along with a highly focused summer employment / co-op education program for college students.

 

                                        v.    Summary

 

1.   Cost of such a program $4 to $5 million per year

 

2.   Upon maturity each accounts would have $50 to $70,000 if the minimum $1,000 was deposited in private savings each year. 

 

3.   Keeps in the forefront of the attention of a child and their parent the importance of education

 

4.   Mobilizes private savings for education

 

 

5.   A focus for gift giving by relatives and friends

 

6.   Increases the awareness of higher education as a social priority

 

 

 

5.   Remove Magical Thinking and base all current and future pension and insurance payments on sound actuarial analysis.

 

a.    This should be obvious, however, as the latest tri-annual actuarial report states, current pension and insurance policies do not support future payment intentions.

 

 

This is but a quick overview.

 

The nation's savings nest has many holes in it.  An urgent re-visioning of these functions is required immediately.

 

We conclude by repeating a critical point made above:

The KEY point we feel we need to internalize is that we (the TCI) do not have an over abundance of sufficiently literate financial experts to manage three or four separate government entities each managing millions of dollars.  It would be best to focus all our talent, and all our OVERSIGHT and “trip-wires” onto one agency.

 

 

 

Respectfully,

Editors@TCIJournal.com

TCIJournal@gmail.com