The “BOSS” will ensure employment amid COVID-19

The BOSS programme or “optional national meeting turn” will ensure employment and will finance capital expenditure brought by COVID-19.

Officials of the Ministry of Finance have been meeting with representatives of the labour unions to discuss proposals to facilitate the Government’s objective of creating much needed fiscal space, given the projected decline in revenues occasioned by the global pandemic, COVID-19.

At Friday, May 27, some 41,836 claims for unemployment had been made to the National Insurance Scheme, which represents almost one-third of the workforce. Given this untenable number of persons now unemployed and projections for further declines in employment, the level of contributions to the Unemployment Fund will be significantly reduced. The government, therefore, has the fiduciary responsibility to finance shortfalls.

Discussions centred on how the Government can maintain social stability in light of an escalating unemployment situation in the private sector, which threatens to further destabilize the Government’s revenue.

The Ministry of Finance gave the assurance that, notwithstanding the challenge, Government is committed to the objective of job retention within the public service over the next 18 months except where, as previously stated, the objective of efficiency is being pursued. 

The main tenet of the proposal is the opportunity to redirect funds now earmarked for public expenditure on wages and salaries to generate as much economic activity as possible within the country by shifting them to capital expenditure. This would allow the Government to finance an expansion of its capital works programme to create more jobs and complete urgent construction works without further impacting the fiscal targets and to put as many people back to work as possible, thereby easing the burden on the Government’s responsibility to finance unemployment benefits claims.

Public Service playing its part to save Barbados

In the face of this scenario, the Ministry of Finance has recognised that the Public Service can play a key role in the stabilization efforts during this challenging time, and has devised a programme to achieve this without in any way disadvantaging these workers. The Barbados National Savings Scheme (BOSS)  is like any “meeting turn” —   except that you earn an attractive rate of interest on the money you save every six months and then you get back your savings after four years. It is therefore designed to provide an opportunity for public servants to optimize on the savings/investment opportunity, given the current market conditions for interest rates whilst allowing the Government to temporarily shift a portion of its wage bill to capital expenditure.

The idea is to pay workers a portion of their salary in cash (the majority) and the remainder (about 10 per cent on average) in a bond. By doing so, only the portion paid in cash is recorded as an item of expenditure on the Government’s books but not the portion paid as a bond – which is recorded as debt. So Government is now able to shift the monies that are not needed to pay the bonds now into its capital programme.

The worker still gets his/her full salary but a portion of the salary is paid in a bond, which can be easily and seamlessly converted into cash if needed, once the public officer exercises that option.

To compensate the worker for freeing up a significant amount of cash that the Government will then use to finance its critical capital works projects, which will, in turn, benefit all Barbadians through the creation of jobs and the acceleration of economic growth, the Government is offering an attractive interest rate on the bonds of five per cent.

The proposal is to convert a portion of the net take-home monthly pay of public officers according to the table shown below.  It is important to note that public servants in the first band, that is, those earning less than $3,000, can exercise an option to participate if their circumstances allow, in order to benefit from the savings/investment opportunity.

Net Monthly take-home pay including allowances	Percentage of net take-home pay converted to bonds
$1 – $3,000	0% (Persons can opt-in at a % of their choice)
$3,001 – $4,166	7%
$4,167 – $8,333	12%
$8,334+	17%

Similarly, any public servant can choose to increase their saving options if their circumstance permit, which would allow them to maximize the savings benefits. For example, a public servant in the $3,000 to $4,000 band may choose to save 10% in Bonds as opposed to the 7% current offered, and in this regard, the Government will accommodate.

Given current interest rates in commercial banks and other financial institutions, this proposal presents a great savings opportunity for public workers. For example, if you can save just $200 a month in bonds, then over an 18-month period you would have saved $3,600 and earned interest of $720 over the four years. The public servant would only earn $21.60 if those funds were saved in a bank (some other examples are given below).

We recognized that some persons may need to have access to all their funds each month. In those instances, provision has been made for public servants to seamlessly convert bonds into cash. As long as the worker indicates, before his/her payday that he or she prefers to have the bond value in cash, this will be accommodated at par conversion (a $1 Bond converts into $1 cash). Conversions of Bonds after payday may incur a small discount as the public servant would have already benefited from some of the interest on the Bond.

It’s A WIN-WIN

This is a BOSS programme cause I’m helping my country get back on its feet. It’s not a pay-cut!! A portion is used for MY personal investment and savings.

1. I get 5% interest on savings (Banks and Credit Unions only giving 0.15%)
2. I’m helping my cousin and neighbour get work (There will be thousands of jobs within the capital works programme)
3. I’m helping my daughter and son get a better education because the money will help with the upgrading of their schools. 
4. I’m helping my friend in the country because the money raised will help revamp the water systems so they can finally get water continuously.
5. Plus, my car is going to last longer because they’re finally going to fix the roads. de roads to protecting the car
6. And if something unforeseen happens, I can get my money whenever I want it, without waiting!!!!

Bonds and other FAQS? Know the full details by downloading the document here

In other news:

More relaxed curfew for the BVI soon