JIS News

The registration and licensing requirements for institutions, which provide pension services, will form the basis of discussions on the Pensions (Superannuation Funds and Retirement Schemes) Bill, 2003, at the Jamaica Conference Centre on Friday, January 30.
Tabled in Parliament in December 2003, the Bill seeks to provide the legislative and regulatory framework to govern pension systems in Jamaica. There is currently no legislation to govern the operations of the more than 1,500 registered pension schemes.
The law is designed to reform the island’s pension system and install safeguards to avoid the imprudent investment of pension funds as was seen during the 1990’s when the Financial Sector Adjustment Company Limited (FINSAC) had to step in to avert disaster.As such, the Bill proposes that the Financial Services Commission (FSC) regulate and monitor the pensions industry.
“The Bill will require that individuals and entities involved in providing pension services meet the ‘fit and proper’ standards currently required in the financial sector,” Executive Director for the FSC, Brian Wynter tells JIS News.
He adds, “these standards seek to ensure that the persons involved (in providing pension services) have the necessary competence and ability and will operate with the required diligence, and that they possess the level of integrity and probity necessary to protect their clients’ funds”.
Once the Act is passed, Mr. Wynter says the FSC will be promulgating regulations setting out the criteria for investing pension funds, which will include having an appropriate diversification of investments and ensuring that these investments are suitable to the specific payment profiles of the funds.
In explaining the suitability of investment options, Mr. Wynter says a pension fund in which most members are about to become pensioners, would have a different investment requirement from a scheme that has mostly young members, who would become pensioners in 20 to 40 years.
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.
Friday’s seminar, which is a precursor to an upcoming public education campaign on the Bill, will not address the issues of vesting and portability. The current Bill does not speak to the issue; however, this will be addressed by future legislation.
The issues of vesting and portability were proposed in the White Paper and sought to ensure that persons are adequately prepared for the future by not withdrawing their compulsory contributions before retirement.
Strong opposition to this proposal was raised, particularly by the trade unions, which contended, that persons should be allowed to claim refunds, if they so desired.
The seminar is open to the public but is geared specifically for trustees and administrators of pension funds; investment managers; employers; trade unions and professionals, including accountants and actuaries. The registration cost for persons attending the seminar is $2,000.

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