Charles

Minister of Labour and Social Security Pearnel Charles has rejected suggestions that the National Insurance Fund (NIF), which provides funding for the National Insurance Scheme (NIS), is overextending itself by unnecessarily acquiring real estate.

"The NIS Funds are protected on all fronts by a board, an investment committee, the Ministry of Labour, the finance ministry and the Cabinet," Charles told The Gleaner.

Charles would not say whether the NIF was over extending itself, but conceded that some stocks it had invested in had fallen below market value.

However, the social security minister emphasised that the NIF would not dispose of stocks which have fallen in value until they return to market levels. "That is the way investments go, you gain and you lose, but we are not giving the money away," he said.

Charles was dismissive of claims by the Opposition that the NIS was experiencing a severe cash crunch as payout was outstripping inflows from salary deductions.

The Opposition charged that the fund was having a problem trying to convert fixed to liquid assets in order to meet its payout responsibility.

$471 million real estate

Eyebrows were raised at last week's Standing Finance Committee meeting of Parliament when Dr Horace Chang, housing minister, revealed that the NIF had purchased $471 million worth of real estate owned by the National Housing Trust (NHT).

The move is reportedly intended to ease liquidity challenges, likely to come about by the package of initiatives recently announced by the management of the NHT.

However, Charles told The Gleaner there were no laws on the books to prevent the investment of the funds by the board.

"The NIS is run by a board which has set up an investment committee designed to seek the best possible investments from the NIS Funds," Charles asserted.

"Every major investment must be reported to the minister (of Labour) who must get the approval of the finance ministry.

Charles said, on some occasions, Cabinet approval was necessary.

It is understood that among the real assets which are challenging the NIF are the Dyoll building in New Kingston, the Air Jamaica building, downtown, Kingston; the former NIS office on Ellesmere Road in Half-Way Tree and the Portmore Skating Rink, which has remained vacant for more than 10 years.

Over the last six months, the NIS has reportedly been on a massive drive to sell some of its real estate assets.