Barbados National Insurance Scheme > Guide to Benefits:  

• The introduction of fexible NIS retirement/pension ages so that in due course persons may retire on an NIS pension at any age from age 60 to 70. Insured persons may qualify for early pension from 64 years only. In future years this age eligibility will gradually be lowered.

  To ensure that there is no financial advantage as a result of choice of retirement age, persons opting for early retirement will recieve a reduced pension.

  Late retirement up to the limit of age 70 has been allowed immediately; conversely increases will apply to those retiring later than the NIS pensionable age.

  The adjustment rate has been set at 0.5% for each month earlier or later than the NIS pensionable age.

• A change has been made to computing the average annual insurable earnings on the best five years instead of the best three years.

A person's pension at pensionable age is not tied to retirement. Pensionable age is currently 65 years and will remain so until 31^st December 2005. Thereafter pensionable age will increase by 6 months every 4 years commencing on 1^st January 2006 until it reaches 67 years in 1^st January 2018. Old Age Contributory Benefit may either be a grant or pension. If a person qualifies for old age contribution pension, an old age contributory grant is not payable.

To qualify for an old age contributory grant one must:

1. have attained pensionable age;
2. have at least 50 contributions paid or credited to one's account.

The amount of an Old Age Contributory Grant is a lump sum equal to 6 weeks average insurable weekly earnings for each 50 contributions actually paid or credited to the insured person's account.

Average insurable weekly earnings for the purpose of Old Age Contributory Grant is the sum of the insurable earnings on which contributions were based, divided by the number of weeks of contributions.

The Old Age Contributory Pension is now available at the ages ranging from:

1. The N.I.S pensionable age - presently 65 years;
2. Voluntary pensionable age - any age below the pensionable age as low as age 60. However, effective 1^st January 2003 receipt of a pension is only possible from age 64.
3. Late retirement age - any age after the N.I.S. pensionable age but to 70 years;

In addition, to qualify for N.I.S pension one must:

1. have at least 150 contributions actually paid to one account;
2. have at least a total of 500 contributions paid or credited to one's account.

The annual rate of pension is 40% of the average annual insurable earnings of the insured person, supplemented by 1% of the total insurable earnings on which contributions were based subsequent to the first 500 contributions paid or credited, but subject to a maximum of 60% of average annual insurable earnings (at pensionable age), and a minimum pension of $105.00 per week.

Average annual insurable earnings for the purpose of an old age contributory pension is the sum of the insurable earnings on which contributions were based during the best five contribution years of the last fifteen contribution years of the insured person's contribution life, divided by 5. Where the contribution years are less than fifteen, the total number of contribution years will be used.

The supplemental pension is computed by totalling the weekly insurable earnings represented by the contributions in excess of the first 500 and finding 1% of the amount.

The maximum pension at pensionable age i.e the basic pension plus supplement pension, shall not exceed 60% of the average annual insurable earnings.

An insured person had 950 contributions paid and credited on his behalf over his working life. The average annual insurable earnings (based on the best five years) were $13,000. The value of his contributions after the first 500 was $115,000.

In order to qualify for an early pension one must have actually retired from employment. It should also be nonted that a person qualifying for the minimum pension would not be allowed to claim an early retirement pension, as that would reduce the payment below the minimum standard.

In the above example, the resulting pension payable at pensionable age was $122.12 per week. If a pensioner opted for early retirement pension at age 64 years 3 months, following would apply:

If the pensioner had deferred receipt of the pension to age 66 years 8 months, the following adjustment would apply: