Amended Pension Bill Passed in House

The Pensions Reform (Superannuation Funds and Retirement Schemes) Act 2004 was passed in the House of Representatives yesterday (May 11), with 48 amendments, and has been sent to the Senate for debate.

Fitz Jackson, State Minister for Finance and Planning with responsibility for pensions, said the legislative side of the Bill should be completed within the next couple of weeks, while work continued on the accompanying regulations, for the Bill to take effect.

Mr. Jackson was addressing a two-day public education seminar today, held at JAMPRO’s offices on Trafalgar Road, to discuss the implications of the Bill.

The legislation, which was tabled in the House last December, seeks to enact provisions for the approval and registration of superannuation funds and retirement schemes; for licensing of administrators and investment managers; for registration of trustees; to specify the fit and proper criteria to be met by persons who are administrators, trustees, board members, investment managers and other persons in managerial positions; to provide information to the Financial Services Commission (FSC) and to members of the superannuation fund or approved retirement scheme; for the winding-up of superannuation funds and retirement schemes; for the amendment of trust deeds and plan rules; and for solvency standards.

The new regime is to be administered by the FCS, which is responsible for issuing licences and granting approvals and registration. Provision is made for appeal of the Commission’s decision to refuse to grant or renew licences, to refuse approval and registration or to suspend or cancel a licence or registration.

Various sanctions are prescribed for offences, including operating as administrator or trustee without licences or registration; operating unregistered pension funds or retirement schemes; breach of confidentiality or failure to keep records. Mr. Jackson said that although the Bill was considered to be overbearing, in terms of the regulations, the aim was to sufficiently manage the magnitude of funds in the industry and ensure that there were adequate regulations to deal with the security of those funds.

“Pension funds are very different from other areas of investment, because these contributions represent the investment of working Jamaicans throughout their lifetime, where the return is expected to accrue when they cannot work any longer. There is no make up time for these people when they retire. The whole regulations and supervision of pension investment, we feel, must be treated within a very particular way,” he emphasized.

He noted further, that the increased regulation of the pensions industry, was part of government’s efforts over the last few years to boost the financial sector. There was also the implementation of extensive legislative and supervisory guidelines in the banking, securities and insurance industries. The training session, being conducted by Coke and Associates/Eckler Partners, is designed to provide information on the roles and responsibilities of trustees, administrators, investment managers and the transitional arrangements.