JIS News

State Minister in the Ministry of Finance and Planning, Fitz Jackson has urged employees to view their pension fund as a long term investment and not as a regular savings account.
“Too many Jamaican workers at all levels of the employment continuum tend to see pension as a regular savings,” he said
The State Minister, who was speaking at a recent JIS ‘Think Tank’ noted that employees have a tendency when they change jobs, to take their contribution and spend as they would with any other savings, because they have a large pool of money at their disposal. “The only persons who can afford to do this are those who do not intend to live until retirement,” he reasoned.
Continuing, Mr. Jackson said that while the Jamaican society has been accustomed to retirement security being provided by children, increases in consumption levels have rendered this practice impractical.
“The typical Jamaican family send their children to school to get a good education and then they expect them to get a good job and earn well and support their family and support the parents in retirement,” Mr. Jackson said.
“That whole phenomenon has changed and people are living much longer. The consumption level of these families are much higher than what they used to be and so it is becoming a burden having to maintain your own family and your parents,” he noted, adding that the best thing for employees is to ensure that during your working years, adequate provisions are made for retirement.
The Government is currently embarking on the second phase of the pension reform process following extensive consultation with all the key stakeholders in the pension industry.
According to Mr. Jackson, the reform agenda would set out to establish some minimum levels of performance by all the participants involved in the management of pension schemes throughout the country.
“One of the reasons why the regulation for pension schemes tend to be more conservative and more rigid than what obtains for regular saving accounts is the fact that upon retirement, individuals need to be assured that there is adequate provision to provide an income,” he explained.
“We want our people to have a better life upon retirement and it is for that reason that the government sought to pursue the reform with the vigour that it has over the years,” he noted.
Meanwhile, Senior Vice President in charge of Business Development and Client Management at NCB Insurance Company Limited, Audrey Chin told JIS News that there would be a need for more public education on the pension industry in Jamaica.
“There is a growing need for extensive public education as the level of awareness among members suggests that there is a knowledge gap,” Mrs. Chin said.
According to the Senior Vice President, “administrators, pension fund managers and regulators will need to collaborate to improve the level of awareness with respect to pension and its impact on an individual’s financial plan for retirement.”
Mrs. Chin explained that a number of critical issues, such as portability of pension funds as well as the lock-in of contributors’ compulsory contributions to be addressed during the second phase of the reform process, would require a great deal of sensitization for pension plan members.
Commenting on the issue of portability, Mrs. Chin said that it would be important for persons to recognize that they need to desist from withdrawing their pension prior to retirement, especially when there is the option to port.
Warning against the practice of terminating and withdrawing one’s pension contribution when changing jobs, Mrs. Chin advised that this practice compromised the individual’s ability to have a reasonable and worthwhile pension when they reach retirement.
“If during your working life you deplete your pension savings, then by the time you get to your last job, you will not be able to accumulate enough to take you into retirement and so you end up with this huge gap where your final job is not able to provide you with a worthwhile pension,” she cautioned.

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