Tuesday, October 15, 2019

NIC Defends Investment In Cabot Project

Press Release:– The National Insurance Corporation’s most recent investment has generated much discussion and concern. 

The purpose of this statement is to reassure all our stakeholders, in particular, our contributors, that the NIC at all time acts within the parameters of its Investment Policy and Guidelines which has been in effect since 2002.  

The propriety, rigour, and independence of our investment process are such that the NIC emerged from the financial crises of 2002 and 2008, the latter being the most devastating since the crash of 1939, as well as the unraveling of CLICO, without incurring any losses.

Investment decisions are made by the Investment Committee, after the Investment Manager has assessed a proposal from an interested party. 

This assessment includes rigorous due diligence. When the Investment Manager is satisfied that the proposal is worthy of consideration, a recommendation is made to the Investment Committee, which further analyses the proposal.  

The Committee may require further information and then it makes its recommendation to the Board, which may or may not accept the recommendation.   

In respect of the particular investment in question, discussions and negotiations exceeded one year and the board gave its final approval only after all its concerns were addressed, the primary one being the security of the investment to be made. 

This process is followed for each and every investment opportunity without fail.  

The NIC’s Investment Portfolio is valued at EC$2.3 Billion. These investments are in the following assets:

% of POLICY
Investment Value Total Range
$
Loans & Fixed Income 333,605,996 14.7% 10 – 20%
Fixed deposits 236,341,437 10.4% 10 – 15%
Properties 278,631,618 12.3% 10 – 20%
Gov’t Lending 485,717,362 21.4% 20 – 30%
Equity 149,087,271 6.6% 5 -15%
Regional  Investment 266,563,636 11.7% 10 – 15%
Extra-Regional Investments 294,976,416 13.0% 5 – 15%
Cash on Call Accounts in Banks 224,184,016 9.9% 0 – 1%
Total 2,269,107,752 100.0%

The above does not include NIC’s planned affordable low-cost housing project with a preliminarily cost estimate of EC$ 51 million.

The NIC’s authority to invest comes from the National Insurance Corporation Act and its Investment Policy and Guidelines.

Section 21 of the Act charges the Investment Committee with the investment of surplus monies in

(a) acquisition of Land

(b) purchase or construction of Buildings

(c) Loans

(d) Government bonds and securities

(e) Shares and Debentures in bodies corporate

The Investment Policy and Guidelines and any revision to it is approved by the Investment Committee, the National Insurance Board and the Minister responsible for the NIC or social security (traditionally the Prime Minister). 

The following is extracted from the NIC’s Investment Policy and Guidelines.

The text is identical to that of the Investment Policy and Guidelines throughout the years from the first policy approved in 2002. 

“5(2) TOURISM

In addition to the raison d’etre as legislated, the National Insurance Fund serves a secondary but equally important role; it serves as a financial intermediary in that it mandates savings which can be channeled into the productive sectors of the economy.   Given that tourism is the one major area whose development can have the greatest positive effect on the local economy it is imperative that we emphasize investment therein. Allocation to this (and the other productive) sector(s) is indispensable in stimulating growth which is essential if the Fund is to perpetuate itself.  To remain viable, the fund must grow, both in terms of registered contributors, and assets to support claims. Investment in this area should influence positively the attainment of that goal. It is important however that we keep in mind the nature of the Fund, being a pension fund, and that the assessment of all investment opportunities therein must be carried out under consideration of our investment objectives in order of safety, liquidity and yield.  Investments will depend on the availability of suitable and safe opportunities.

In the event of mutually exclusive investments involving the tourism sector and any other sector or category of instrument, everything being equal, investment in the tourism sector will be preferred.   Direct investments in the tourism sector should not exceed 10% of total investment at cost.

EXISTING COMPANIES (Tourism related)

Therefore, for Fixed Income Investments viz. Loans and Bonds, the factors as per (C) above, and for Equities as per (F) above should first prove satisfactory.

NEW COMPANIES (Tourism related)

The NIC should not participate in the equity of a start-up company.  However, the NIC can participate via fixed income instruments (loans, bonds) which should be appropriately secured and which would ordinarily have first claim on the company’s assets.  The NIC can contribute to start-up equity of small hotels/concerns by contributing to a Venture Capital Fund or a Development 

Fund, an amount not exceeding 1.5% of the total portfolio at cost which would circumscribe the NIC’s exposure to that asset class.”

The Report on the recent 11th Actuarial Valuation Review of the National Insurance Fund conducted by the Actuarial Services Unit of the International Labour Office (ILO) states in respect of Investments – “Given the limited range of opportunities for investment in St Lucia, the current uncertain economic and investment environment around the world, and the good returns achieved so far, no change in investment policy is recommended at this stage”. The same representation was made in the reports of the 9th and 10th Actuarial Reviews.

The mission of the NIC as embodied in its Mission Statement crafted in 1999 mandates the NIC:

“To ensure that every St. Lucian enjoys social and financial protection and to assist in the development of our nation through the efficient collection of contributions, payment of relevant benefits, prudent management of assets, use of cutting edge technology, and a cadre of highly skilled staff.”

The Vision Statement provides greater clarity in maintaining NIC as “An effective, transparent and financially sound institution which is customer focused, provides social protection to the St. Lucian population and plays a leading role in national development.”

The “Cabot project” involves the development of a world class golf course, construction of a hotel, villas, a beach club and sale of lots. This is expected to generate employment locally as well as provide St Lucia with additional visibility internationally.

The NIC’s recent investment in Cabot (St Lucia) Inc. meets the requirement of the Act, the Investment Policy and Guidelines, and its Mission and Vision statements.

In addition, the investment was rigorously assessed by the NIC’s in-house team, its Investment Committee and the Board; the returns were negotiated at a rate higher than the average returns on the current portfolio and security was obtained which value is three and a half times NIC’s investment. 

The NIC is confident in its decision. The Corporation has always acted and will continue to act “for the benefit of us all”

Matthew L Mathurin

Director

14 COMMENTS

  1. I am 54 years old and have work all my life in the private sector like a slave I just need all my money from the NIC and do something for myself I do not want to be in that system any more as there is to much exploitation in the private sector as far as I am concern the entire board of the NIC are crooks and she be in jail

  2. Stop making a fool of yourself. Your comment is nothing but ignorance and fails to have any semblance of logical reasoning in the face of the facts fm the NIC. To many experts in st Lucia who hold no qualifications or experience except being able to type nonsense in a keyboard.

    • If Freemason is a contributor then within is right to withdraw his contributions. As a contributor he has right to his opinion of the board managing his contributions I see nothing “foolish” in that, just saying

  3. 07/06/2019
    I Proclaim on the rooftops that the “King is coming to redeem the earth of its curse.”! I announce to the ends of the earth, that the “King is coming”. And that the days of Noah are here. “Prepare ye the way of the Lord and make straight his paths.” Tell all the world that I am coming back soon. “I am coming for those who have laid their burdens down”. In the name of Jesus Christ, I pray, Amen.
    The father says: Your voice surely reaches my throne in heaven. I am dancing with you and watching over my word to see it performs. You cannot hold positive and negative thoughts in your hands about the same issue at the same time, one will always win out over the other. Which will you decide to hold on too? Let a positive mindset draw the law of attraction right to you this day. Find breakthroughs on issues that would not submit to your authority before now. Find keys and answers in areas you could not find answers before now. Strategies are being reborn inside of you to handle the higher dilemmas that have plagued you. I will never leave you without my wisdom. Call upon me for what you feel in lack of. I am right here ready to give you all you are in search of. You are not denied and find that your spiritual senses are more alert this day forward.
    What you wrestle for and against is coming to a pinnacle of my glory. I am tying up loose ends and establishing you upon the high point for you to see from a new vantage point. What looked impossible will get a fresh light upon it. You will see the strategy is laid out before you; come up higher. Hear the thunder and see the lightening. Can you feel the air shift as the atmosphere receives the charge? My Angels have gone out before you, take up your spear and shield and move forward. What you fear is about to be made a prisoner of your mind and will. You were born to overcome at this exact moment. Many will take for granted what is about to happen and walk right on by their miracle. Take heed for this moment is priceless. What you focus on will become larger in your life, be sure to recognize what is good and what is tearing you down. Let go of what does not produce life in and through you. Let go of arguments and strife that will ultimately go nowhere.
    * These are exclusively the words of –Yahuwah and his son Yahushua Mashiach.
    God the Father, the Great King wants his name to be promoted in the four corners of the earth. Repent now; get baptized and receive the gift of the Holy Spirit, those of you who are in the valley of decision. Do not procrastinate any longer but go ahead and choose God, for when the door and the books are closed no one will be able to enter in. God is sending warnings after warnings. We are in the End Times and he does not want ANYONE to Perish. Time is running out, get saved now while you have time. He is the only way to salvation. Amend your ways and you will be allowed to remain in the land. Let those who have ears to hear and those who have eyes to see. Repent now! Remain strong, be bold, courageous and steadfast in your faith.
    The Lord is saying that: there are people in the churches, in the pulpits, the choir, the church boards, (church in general), who claim to know him but do not have a personal relationship with him, his spirit does not dwell in their hearts and they need to learn how to build a relationship with him, so he can dwell in their hearts. Repent now, pray without ceasing, read his word daily and speak to him as your best friend or father. Do not hesitate to do this as his judgments have already begun. The end of everything has begun.
    Credit to Brother Shomrim, may God bless and protect you my, brother.
    – God’s messenger, chosen vessel and prophet to the world.

  4. Rules, regulations and policies are of no significance. Successive governments have thwarted them to suit their agendas. This statement provides no reassurance to NIC contributors. The decisions are made by individuals who may full well have party affiliation and stand to benefit directly or indirectly. Why is there a need to use NIC money to invest in something to enrich a private company. I need an explanation as to how the corporation stands to profit from this investment. Will the corporation be a majority shareholder? These are the things which will provide reassurance to a contributor like myself. No a list of policies, rules and whatever else was shown. Not everyone is in the 43%….

  5. Incredible. We’re using our pension money to invest in projects that stand to enrich private foreign investors while denying us access to our heritage, beaches, landscape. Tell me Mr. Mathurin, did you look at the masterplans that show the renaming of the beach that is now proposed to have million dollar villas on it ‘Resident’s Beach’ indicating that it is for the residents of the villas only? Selling St. Lucia for foreign profiteering – using our pension money to ultimately deny our children access to their homelands shores, our ‘land of beaches’.

  6. It’s, absurd for us as a nation to continue to insult and abuse one another when we speak for our rights. If, the man is a contributor to the NIC, he has every right to to ask questions as to how his contributions are being spent. Is, it the right thing to do, to use our retirement monies for an investor to enrich his and we should stay quiet. I’ve serve my Country for 27 years, am I to say that I’m foolish and ignorant;If, I were to ask the same question too. We, need to stop this hipprocities and being too political, when we are seeing the wrongs. You don’t have to have a degree to see and understand what’s affecting us and to ask a question. I, urge some of the writer’s to please respect each other’s views and opinions, because we all have in our island. When something is good for this country we all shall enjoy it and when it’s bad we all suffer and pay. Please respect other’s and stop the disgracing, because it’s makes all of us looks bad on the World stage and not as one individual.

  7. Terms to google to understand what has happened:

    What is Collateral
    What are Interest Rates
    How do pension funds work

    After you do this, no more silly questions will have to be asked …. hooray

Comments are closed.

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