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NATIONAL INSURANCE CORPORATION

ANNUAL STATISTICS REVIEWJuly 2010 – June 2011

Prepared by: P. Kallicharan

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TABLE OF CONTENTS

PageExplanatory Notes And Symbols………………………….........………..….………………........................3Contribution Income…………………….........................................................................5Active Insured Population…………………………………….…………….……….……………..........................7Employers’ Activities……………………….....………………………….………………................................9Benefits Expenditure………………………….…………………………………………..................................12

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EXPLANATORY NOTES AND DEFINITIONS

Contribution:Refers to the payroll deductions from employees (5%) matched by employers (5%). This is payable monthly to the National Insurance Corporation for social security coverage of employees .

Industrial Classification Refers to the international standard industrial classification of all economic activities.

Insured PersonsRefers to all registered persons with at least one month’s contribution. Active Insured

Refers to all registered persons who have paid at least one month contribution in the review period.New Entrants

Refers to a person who was registered for the first time with the National Insurance in the review period.Benefits

Includes any benefit, grant, allowance or pension payable under National Insurance Corporation Act.C3 Form

Refers to a form that is sent by employers to the National Insurance on a monthly basis, indicating contribution deductions per employee and employer’s matching contributions.Pension In-payment

Refers to pensions in-force (active)at the end of the period in review.Active Employers

Refers to employers registered with the National Insurance and in operation during the review period.Closed Employers

Refers to employers registered with the National Insurance who were not in operation at the end of the review Period.Current Contributions

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Refers to contributions for a given month which are collected within the required time frame (before the 8th of the following month).Past-Due Contributions

Refers to contributions for a given month which are collected after the required time frame.Contributing Employers

Refers to employers who paid contributions to the National Insurance Corporation during the review period.Self-Employed

A person who carries on any trade or business enterprise, including professional services or any other lawful activity which generates an income, is over 16 years and is ordinarily resident in St Lucia.Voluntary Contributor

A person who is below pensionable age, resides in St Lucia, has 60 months contributions, and is no longer employed or generating an income but who is allowed to make contributions under provisions of the NIC Act.

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1. Contribution IncomeThe financing of the NIC is based on a total contribution rate of 10.0% (5% employer and 5% employee) of insurable earnings. During the financial year under review, contribution income totaled $98.40 million on behalf of 51,104 active contributors. When compared to the previous financial year, contribution income increased by $7.57 million or 8.33 percentage points. A review of the last two (2) years indicated that contribution income increased by 13.18%. The trend of contributions recieved for the last five years is illustrated in chart 1.It can be seen from Table 1 that with the exception of Construction and Voluntary Contributors, there were positive performances in contribution income from all Economic Sectors.Chart 1

Table 1 shows contribution income from Wholesale/Retail, Restaurants/Hotels, Transport/Storage/Communication, Real-Estate/Renting/Business Services and Public Administration increased by approximately 10% each. Other Economic Sectors which recorded moderate growth in contribution income included:

1. Agriculture, Hunting, Forestry and Fishing- 7.52%;2. Electricity, Gas and Water Supply: 6.79%;

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3. Community/Social and Personal Services- 10.98% and4. Financial Intermediations: 6.26%.

On the other hand, the Construction sector was the only Economic Sector that recorded a decline in contribution income of 4.40%.

Table 1 CONTRIBUTION INCOME BY ECONOMIC SECTOR

(July 2009 - June 2011)

Economic Sector 

Variance Percentage Variance‘09 – ‘10 ‘10 – ‘11

Agriculture, Hunting, Forestry and Fishing 1,122,928 1,207,384 84,456 7.52%

Mining and Quarrying 285,465 295,754 10,289 3.60%

Manufacturing 6,208,125 6,281,780 73,655 1.19%

Electricity, Gas and Water supply 2,619,592 2,797,340 177,748 6.79%

Construction 4,186,419 4,002,074 -184,345 -4.40%

Wholesale and Retail Trade 12,080,368 13,339,275 1,258,907 10.42%

Restaurants and Hotels 16,508,965 18,166,311 1,657,346 10.04%

Transport, Storage and Communication 6,491,788 7,153,608 661,820 10.19%

Financial Intermediations 7,570,071 8,043,793 473,722 6.26%

Real-estate/ Renting /Business Services 7,172,916 7,861,095 688,179 9.59%

         Public Administration and Defense,        Compulsory Social Security, Education,        Health and Social work 19,747,259 21,684,994

1,937,735 9.81%         Community, Social / Personal Services,        Households with Employed Persons and        Extra-territorial Organisations and Bodies 5,908,862 6,557,606

648,744 10.98%         Self-Employed 652,744 704,757

52,013 7.97%Voluntary Contributors 45,507 44,909 -598 -1.31%Activities not adequately defined 228,455 254,327

25,872 11.32%Total 90,829,464 98,395,007 7,565,54

3 8.33%

2.Active Insured Population

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The active insured population comprises of formal sector employees, self-employed persons and voluntary contributors. In 2010-2011, active insured totalled 51,111 persons- 97.78% were formal sector employees, 2.06% were self-employed and 0.16% were voluntary contributors. When compared to the previous financial year, active insured increased by 3.36% and accounted for 71.54% of the country’s employed population. The growth of active insured was mainly from the following economic sectors:

Wholesale and Retail- 378 or 4.77%; Hotels and Restaurants- 604 or 7.25%; Real Estate, Renting and Business Services- 365 or 9.11% and Public Administration, Defence, Compulsory Social Security, Education,

Health, Social Work- 365 or 4.06%.

Collectively, those economic sectors employed 26,788 persons and accounted for 52.41% of total active insured persons. Table 2 shows the distribition of active insured on the basis of economic activities.

Table 2

Distribution of Active Insured by Economic Sector: July 2009 – June 2011

Economic Sector 2009-2010 2010-2011 Variance Growth

Agriculture , Hunting, Forestry and Fishing              932               954               22  2.36%

Mining and Quarrying              133               144               11  8.27%

Manufacturing          3,914           3,762      -152  -3.88%

Electricity, Gas and Water Supply              709               757               48  6.77%

Construction          3,047           2,815         -232  -7.61%

Wholesale and Retail          8,120           8,507            387  4.77%

Hotels and Restaurants          8,326           8,930            604  7.25%Transport, Storage and Communication          3,495           3,440  -55  -1.57%

Financial Intermediations          2,781           2,835               54  1.94%Real Estate, Renting and business services          3,939           4,298            359  9.11%Public administration , Defence, Compulsory Social Security, Education, Health, Social Work          8,986           9,351            365  4.06%

Community, Social, Personal Services, Households With Employed Persons, Extra- Territorial Org. & Bodies          3,773           3,876            103  2.73%

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Self-Employed              924           1,052            128  13.85%

Voluntary Persons                85                 84    -1  -1.18%

Activities Inadequately Defined              286               306               20  6.99%

Total        49,450         51,111         1,661  3.36%Source: Nic Statistics Department

Chart 2 illustrates the active insured population during the fiscal period, July 2006 to June 2011.

Chart 2

3. Employers’ Activities

During the financial year in review, total active employers grew by 2.48% to 3,684. Collectively, the following economic sectors accounted for 69.55% of active employers:

Hotels and Restaurants-10.64%

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Wholesale and Retail-17.48% Public administration , Defence, Compulsory Social Security, Education,

Health, Social Work-7.14% Community, Social, Personal Services, Households With Employed Persons,

Extra- Territorial Org. & Bodies-24.81% Real Estate, renting and Business Services-10.48%

Table 3 below shows the distribution of active employers on the basis of industrial classicfication of economic activities.

Table 3

Distribution of Active Employers by Economic Sector as at June 2007-June 2011

Economic SectorJune 2007

June 2008

June 2009

June 2010

June 2011

Agriculture, Hunting, Forestry and Fishing 143 148 139 129 131           Mining and Quarrying 7 7 7 8 8           Manufacturing 243 252 248 257 261           Electricity, Gas and Water supply 17 18 15 15 15           Construction 168 192 172 171 172           Wholesale and Retail Trade 594 607 630 623 644           Restaurants and Hotels 320 340 359 370 392           Transport, Storage and Communication 153 157 159 162 163           Financial Intermediations 114 118 122 126 125           Real-Estates, Renting and Business Services 341 365 379 392 386           Public Administration and Defence, Compulsory Social Security, Education, Health          And Social Work 233 240 250 256 263           Community, Social and Personal Services,          Household with employed persons and Extra-          Territorial Organization and Bodies 801 852 870 895 914           

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Activities not adequately defined 120 178 198 191 210Total 3,254 3,474 3,548 3,595 3,684

Source: NIC Statistics Department

Of the active employers population, 3,453 or 93.73% paid contributions to the NIC on behalf of 49,975 employees totalling $92.03 million. When compared to the previous financial year, contributing employers increased by 3.67%. Table 4 provides information on the distribution of contributing employers on the basis of Economic Sector. Chart 3 below provides a comparison between active and contributing employers.

Table 4Contributing Employers by Economic Sector: July 2006-June 2011

Economic Sector Financial Year  ’06 – ‘07 ’07 – ‘08 ’08 – ‘09 ’09 – ‘10 ’10 – ‘11

Agriculture, Hunting, Forestry and Fishing 125 129 123 117 114Mining and Quarrying 6 7 8 7 8Manufacturing 200 218 215 230 227Electricity, Gas and Water supply 17 19 18 15 14Construction 128 137 132 126 124Wholesale and Retail Trade 558 570 589 580 619Restaurants and Hotels 282 307 315 316 340Transport, Storage and Communication 138 141 148 150 148Financial Intermediations 110 108 111 118 117Real-Estates, Renting and Business Services 304 328 342 353 359Public Administration and Defence, Compulsory          Social Security, Education, Health/Social Work 240 235 252 251 266Community, Social and Personal Services,          Household with employed persons and Extra-          Territorial Organization and Bodies 821 865 876 892 910Activities not adequately defined 131 126 127 176 207Total 3,060 3,190 3,256 3,331 3,453

Source: NIC Statistics Department

Chart 3

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Growth of both active and contributing employers is in part dependant on the emergance of new businesses. In the review period, 396 new employers were recorded which represented a 5.88% increase over the previous financial year, July 2009 – June 2010. An examination of table 5 indicates that collectively, the following economic sectors accounted for approximately 76% of newly registered employers:

Hotels and Restaurants-16.41% Wholesale and Retail-18.18% Community, Social, Personal Services, Households With Employed Persons,

Extra- Territorial Org. & Bodies-29.80% Real Estate, renting and Business Services-11.11%

Table 5 also highlights strong performances from the Hotels/Restaurants and Wholesale/Retail economic sectors which recorded increases of 10.17% and 28.57% respectively, over the previous fiscal year.

Table 5

Distribution of Newly Registered Employers on the Basis of Economic Sector

Economic Sector Financial Year

09-10 % 10-11 %

Agriculture, Hunting, Forestry and Fishing 7 1.87% 8 2.02%Mining and Quarrying 0 0.00% 0 0.00%Manufacturing 28 7.49% 18 4.55%

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Electricity, Gas and Water supply 0 0.00% 2 0.51%Construction 29 7.75% 30 7.58%Wholesale and Retail Trade 56 14.97% 72 18.18%Restaurants and Hotels 59 15.78% 65 16.41%Transport, Storage and Communication 16 4.28% 12 3.03%Financial Intermediations 9 2.41% 4 1.01%Real-Estates, Renting and Buisness Services 42 11.23% 44 11.11%Public Administration and Defence, Compulsory      Social Security, Education, Health/Social Work 22 5.88% 23 5.81%Community, Social and Personal Services,      Household with employed persons and Extra-      

Territorial Organization and Bodies 106 28.34% 118 29.80%Total 374 100% 396 100%

Source: NIC Statistics Department4.Benefit ExpenditureA core function of the NIC is the payment of benefits to its insured persons when they are unable to work due to temporary incapacity (sickness, maternity, employment injury, hospitalisation, etc), long-term incapacity, death and retirement.

In the review period, 11,913 short-term claims were paid at a cost of $10.54 million and 5,886 pensions and long-term grants were paid at a cost of $46.17 million. Collectively, a total of 17,799 claims were paid at a cost of $56.71 million. Total claims paid rose by 4.61% whilst total benefits expenditure increased by 13.14%. Table 6 and Chart 4 below show benefits expenditure by type of benefit branch.

Table: 6 Short-Term and Long-Term Benefits Expenditure: July 2006 – June

2011(Million $EC)

Benefit Branch

Financial Year’06 – ‘07 ’07 – ‘08 ’08 – ‘09 ’09 – ‘10 ’10 – ‘11

Short-Term 8.42 8.85 9.78 10.06 10.54Long-Term 30.50 34.44 37.14 40.21 46.17Total 38.92 43.29 46.92 50.27 56.71

Chart 4

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Tables 7 and 8 provide information on the distribution of short-term claims paid and corresponding expenditure by type of benefit. Although both the number of Short-term claims and its related cost have increased over the last five years, cost of short-term benefits as a percentage of total benefits expenditure has contracted consistently from 21.63% in 2006-2007 to 18.45% in 2010-2011.

Table 7 Short-Term Claims Paid by Type: June 2009 – June 2011

Short-term benefitsFinancial Year

09 - 10 10 - 11Employment Injury 74 132Sickness Allowance 9,482 9,909Maternity Benefit 1660 1550Funeral Grant 238 245Medical Expenses* 47 77Total 11,501 11,913

Source: NIC Statistics DepartmentTable: 8

Short-term Benefits Expenditure by Type: June 2009 – July 2011

Short-term benefitsFinancial Year

09 - 10 10 - 11Employment Injury 137,145 172,076

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Sickness Allowance 3,544,866 3,898,360Maternity Benefit 2,916,021 2,971,494Funeral Grant 417,296 431,750Medical Expenses 3,049,542 3,064,497Total 10,064,870 10,538,177

Source: NIC Statistics Department

Long-Term BenefitsThe long-term benefit branch comprises of pensions and long-term grants. In the review period, 5,413 pensions were paid at a cost of $43.89 million and 473 grants were paid at a cost of $2.38 million. Cost of pensions accounted for approximately 95% and 77% of long-term benefits and total benefits expenditure respectively. It can be deduced from Tables 9 and 10 that long-term benefit claims paid increased by 4.23% whilst the corresponding cost rose by 15%.Table 9

Long-Term Benefits Paid By Type July 2009 - June 2011

 

Long-term benefitsFinancial Year09 - 10 10 - 11

Retirement 3,951 4,201Survivors * 939 810Invalidity 354 390Disablement 13 12Total 5,647 5,886

* include death benefit Source: NIC Statistics Department

Table 10

Long-Term Benefits Paid By Type July 2009 - June 2011

 

Long-term benefitsFinancial Year

09 - 10 10 - 11Retirement 32,461,253 37,439,605Survivors * 4,629,723 5,012,717Invalidity 2,998,847 3,620,735Disablement 121,835 98,123Total 40,211,658 46,171,180

* include death benefit Source: NIC Statistics Department

Tables 11 and 12 illustrate the number and cost of pensions paid over the financial period, July 2009 to June 2011.

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Table 11

Pensions Paid By Type: 2009 – 2011     

Long-term benefitsFinancial Year09 - 10 10 - 11

Retirement Pension 3,951 4,201Survivors Pension 983 810Invalidity Pension 354 390Disablement Pension 13 12Total 5,257 5,413

Source: NIC Statistics Department

Table 12Cost Of Pensions By Type : 2009 – 2011

     

PensionFinancial Year

09 - 10 10 - 11Retirement Pension 30,977,728 35,576,734Survivors Pension 4,521,268 4,804,159Invalidity Pension 2,894,503 3,413,576Disablement Pension 96,493 95,707Total 38,538,649 43,890,176

Source: NIC Statistics Department