Pension Reform Process Will Create More Vibrant and Competitive Industry – Wynter

Executive Director of the Financial Services Commission (FSC), Brian Wynter, has said that the process being undertaken by government to reform the pension industry will result in a more vibrant and competitive sector.
“We believe that after a few years, as these reforms take effect, we will have a more vibrant pension industry that will contain a suitable level of competition between the service providers, who are seeking to serve the pension industry and ultimately the members of pension schemes,” the Executive Director stated. Mr. Wynter, who was speaking at a recent JIS Think Tank, said that in such an environment, pension plan members will have greater confidence in their pension funds. “When persons are confident about their pension arrangements, they will maximize the opportunities that are provided to them through the tax advantages and therefore they will have a suitable and adequate pension when they retire,” he pointed out.
Phase one of the process, which involves licensing and registration, is at a end and according to the FSC Director, while there have been challenges “we are pleased that with the coming into effect of phase one, we have found that there is a good base to build on.”
The FSC has so far received approximately 523 applications for pension plans with 518 being for superannuation funds as well as 50 applications for licensing as investment managers, administrators or corporate trustees.
“So far, we approved and licensed 41 of those applications for licensing and those investment managers and administrators represent 87 per cent by value of the total pension fund assets,” he reported, adding that one application was refused because the requirement for licensing was not met.
As it relates to the registration of pension plans, Mr. Wynter explained that 50 applications or just fewer than 10 per cent had submitted the requisite documents so that the FSC could begin processing the applications. A number of applicants, he said, did not submit updated constitutive documents such as Trust Deeds and Plan Rules.
“If we have deeds that conform properly to the (Superannuation Funds and Retirement Schemes) Act, especially in ways that reflect the protection that has been put into the Act for members, then we will be well on our way to creating a vibrant pension industry,” he argued.
According to Mr. Wynter one of the challenges for pension schemes is that the Act and regulations represent a new approach to doing business.
“A very important aspect is providing information to members and disclosing to members what is going on in the scheme as well as providing means for members to participate in their pension fund,” he pointed out.
“This is sort of a cutting edge [approach] in pension management worldwide and a number of entities in Jamaica have already begun this practice but it is not done on a wide scale. There is a degree of learning involved as people try to understand what is expected,” he said.
The FSC is the agency of government mandated to supervise and regulate the securities, insurance and private pensions industry. Under the Pensions (Superannuation Funds and Retirement Schemes) Act and its regulations, the FSC is responsible for the registration, licensing and supervision of superannuation funds, retirement schemes, trustees, investment managers and administrators.