House Passes Pensions Bill With Amendments

A Bill, which seeks to reform the island’s pension system and install safeguards to avoid the imprudent investment of pension funds was yesterday (March 23) passed in the House of Representatives with 48 amendments.
The Bill entitled, ‘The Pensions (Superannuation Funds and Retirement Schemes) Act, 2003 was piloted in the House last week by State Minister in the Ministry of Finance and Planning, Fitz Jackson.
Under the Bill, provisions will be put in place for the operation of superannuation funds and retirement schemes. Some of these provisions include the approval and registration of superannuation funds and retirement schemes, the licensing of administrators and investment managers and the registration of trustees.
The Bill also provides for fit and proper criteria to be met by persons who are administrators, trustees, board members, investment managers and other persons in managerial positions.
Under the new pension regime, the Bill proposes that the Financial Services Commission (FSC) regulate and monitor the industry and be responsible for issuing licences and granting approvals and registration.
The Bill further provides for the disclosure of information by pension fund sponsors to the pension plan member, so that the individual can receive the information necessary to evaluate and assess the performance of the institution.
Making his contribution to the debate, Minister of Water and Housing, Donald Buchanan said that the new provisions of the Bill was a comprehensive reform of the financial sector, which would provide confidence to pensioners.
Member of Parliament for St. Andrew North Eastern, Delroy Chuck, supported the Bill, but also raised concerns about the portability of the pension scheme, arguing that pensioners should be allowed to carry their contribution from one company to the other.He said: “Without that portability we don’t really have a full Pension Act because the workers won’t be able to benefit unless they can move their pension with them from one company to the next.”
Clarendon North Central Member of Parliament, Pearnel Charles also endorsed the point. He said that there was the widespread problem in which workers were made redundant and offered their contribution to their pension while the company is left, “cash rich with its contribution”.
In his response, Minister of Finance and Planning, Dr. Omar Davies said that with regard to portability “that is definitely something which we intend to deal with”.
“In terms of the reference to vesting. now that I believe that the conditions are appropriate and there is a set of unanimity from the viewpoint of workers, employers, trade unions and from the Government, we will be in a position to put in place special provisions, which will allow for portability but which will require vesting and hence the contributions made by workers and by employers will be there once it is vested and such that these workers will benefit once they reach retirement age,” he said.
Concluding the debate, Minister Jackson said: “This is a new Bill, we are charting a new course, we have learnt some lessons from the development of regulations in the banking sector, in the securities industry, in the insurance industry and legislative development is a dynamic one, we cannot wait until we have a perfect Bill.”
He pointed out that the vulnerability of thousands of workers in Jamaica, “demands that we do not delay this exercise for one more minute”.