At the invitation of the Government of Guyana (then British Guiana), in agreement with the British Colonial Office in 1954, Professor J. Henry Richardson of the University of Leeds spent about ten weeks in Guyana investigating possible measures of social security. He discovered that more than 60 percent of the persons aged 65 years and over – were in receipt of a non – contributor old-age pension, one of the conditions for which was a severe “means” test. His proposal for the long-term remedy of this undesirable situation and dependence upon relief from public funds for so high a proportion of the aged in Guyana was the establishment of a compulsory savings Scheme or provident fund, to which employers and workers would contribute equal weekly amounts for the benefit of the later.
Professor Richardson’s proposals were based on individual and not on national social security risks, and son this and other points did not conform with internationally agreed standards as conformity with the Social Security (Minimum Standards) Convention, 1952, (I. L. L. Convention No. 102). However, a draft bill was prepared in 1958 to introduce a provident fund scheme and when Mr. Sven Boye, an actuary and a permanent official of the I. L. O. visited Guyana for eight weeks late in 1962, this draft bill formed the starting point for his work of studying the possibilities of the setting up of a national pensions scheme. The resulting Report (hereafter referred to as the “1963 Report) set out and analyzed the financial implications of the provident fund as outlined in the draft bill, and advised that
“… a provident fund cannot be considered to provide adequate protection. The benefits provided would be rather modest for a long period. Provident fund scheme can, therefore, not be considered as the most appropriate transitory measure pending the introduction of a pension insurance scheme”.
The 1963 Report therefore outlined two alternatives for a national pension scheme for old age based on pension insurance principles and also on international standards, and the board financial and actuarial implications were also examined. In November/December 1963, Mr. Boye returned to Guyana on a short visit and later forwarded to the Government a supplement to the 1963 Report.
In 1964 the Government decided to consider steps for the implementation of a National Insurance Pension Scheme for retirement benefits and to obtain experts assistance on the phases of planning, organizing and operation of the scheme.
Early in 1965 the Government resolved that the implementation of a national pension scheme for old age would be immediately examined and that consideration would also be given to the possibility of inclusion of other risks e.g., those of invalidity, death of the breadwinner and accident; it was also decided that the place of industrial scheme, including the proposed sugar industry pension scheme, in the framework of a national social security scheme would be examined.
Consideration showed that two further stages in programme towards the finalization of a national scheme were essential and that it was important to formulate these stages so as to obtain the appropriate and correct expertise required. The stages were broadly:
The consideration of an alternative scheme; the determination of their financial and economic implications; and the selection and formulation of a scheme.
The drafting of the laws and regulations and the setting up of the administrative organization and procedures and the training staff.
In September 1965 Mr. Niall Mac Cabe, a permanent official of the I. L. O. spent four weeks in Guyana and undertook the next stage towards the objective of social security for the working population. Mr. Mac Cabe met representatives of employers and the Trade Unions and had discussions with the Ministers of Labour and Social Security, Finance and Economic Development, and Government Officers of different ministries. The resulting Report (here after referred to as the “1966 Report”) covered feasibility and other matters and an assessment of the financial scheme. The Report also assessed and advised on the types of expert assistance that would be needed for the final stage covering the setting up of the administrative organization and procedures and the drafting of the laws and regulations.
The 1966 Report was based on the standards of the Social Security (Minimum Standards) Convention, 1952) (no. 102). Its recommendation were studied by the Government and interested organizations of the employers and workers.
On May 3, 1966, the Cabinet considered a memorandum form the Minister of Labour submitted with the 1966 Report and on behalf of the Government of Guyana requested the services of an expert for a maximum of twelve months from mid – 1966 to assist in the preparation of draft laws and administrative regulations and structure to assist in the training of personnel to operate a social security scheme.
In the agreement with the Government of Guyana the Director General of the I. L. O. appointed Mr. A. J. M. Petrie, Chief Executive Officer in the Edinburgh office of the Ministry of Social Security (at the time the Ministry of Pensions and National Insurance) of the United Kingdom, to carry out this mission.
Mr. Petrie arrived in Guyana on July 5, 1966, for an initial period of six months, with the understanding that the mission could be extended for a further six months. In view of developments during his mission he remained in Guyana until May 18 1967. On November 22 1966 the Cabinet considered the memorandum and agreed to the establishment of a national insurance scheme. There were no parliamentary draftsmen available to assist in drafting legislation and the expert made a rough draft of a general “enabling” bill. It was hoped that the passage of the Bill could be expedited leaving the details of the Scheme to be dealt with by regulations. This Bill was presented on December 9 1966 to the Attorney General for his consideration.
Consultations with employers’ and workers’ organizations had produced a broad measure of agreement with the proposals but there were certain differences which kept recurring and it was decided that in order to reach agreement on the details of the Scheme a Working Party should be set up immediately consisting of representatives of the Government, and pending the appointment of the Board, the employers and unions. On December 5, 1966, the Minister of Labour and Social Security made a public release of the proposals and issued a paper prepared by the expert, which outlined the Scheme in general terms. At the time he invited the employers’ organizations and Trade Union Council each to nominate three members to the Working Party.
There was some delay in nominating the members of the Working Party, which was finally set up under the chairmanship of the Minister of Labour and Social Security, with five other representatives nominated by the Government (one each from the Ministries of Finance, Economic Development, and Labour and Social Security the Professor of Government and Public Administration to the University of Guyana and the Town Clerk of Georgetown) and three members nominated by the Consultative Association of Guyanese Industry (representing the employers) and three by the Trades Union Council. The first meeting of the Working Party was held on February 20 1967. Eight meetings altogether were held and the Working Party’s Recommendations were submitted to the Minister of Labour and Social Security on May 16 1967.
Due to numerous difficulties the scheme was not set up during Mr. Petrie’s mission and further assistance had to be obtained from the I. L. O. this resulted in the appointment of Mr. F. B. Matthews who was given the following terms of reference:
Except for periods of leave, Mr. Matthews was in Guyana from December 8 1968 to June 13 1971. The scheme came into operation on September 29 1969.
The scheme of benefits to be paid was eventually concluded as follows:
For the purposes of paying the above, contributions were payable by employers and employees at the rate of 7.5 percent of insurable wages against five groups or bands of wages into which the wages of an insured person fall.
The scheme is actuarially assessed on a five-year basis. The growth or expansion of National Insurance Scheme depends on the findings of the actuary at the end of each period of assessment. Actuarial findings are mostly derived from the records and statistics that are made available for this purpose.