Operators of micro, small and medium-sized enterprises (MSMEs) are being encouraged to learn more about creating pension plans for their employees.
Speaking at a recent Jamaica Business Development Corporation (JBDC) ‘Virtual Biz Zone’ session under the theme ‘The Importance and Benefits of Pensions for MSMEs’, Assistant Manager for Pension Administration at JN Fund Managers Limited, Roxanne Wizzart, said it is important that entrepreneurs explore the details of setting up pension plans.
“First thing that they should know is the type of pension plans which are approved retirement schemes or superannuation fund. As an MSME, depending on the size of your organisation, it may benefit you to have a superannuation fund or not, so it depends on the different variables within your organisation,” she noted.
According to Miss Wizzart, pension plans are governed by the Financial Services Commission of Jamaica (FSC) and Tax Administration Jamaica (TAJ) and each pension plan must have a Trustee that is responsible for how the pension plan is administered.
“Each plan has a sponsor, so whether the plan is set up by the insurance company or the investment manager company or employer, they are considered the sponsor. The Trustee looks out for the sponsor’s portfolio, and as members of the plan you also have Trustees that look out for the members,” she further explained.
Miss Wizzart noted that each pension plan is required to have a trust deed and rules.
“Trust deed and rules focus on general things such as benefits, but also to address unique things such as the required contribution, employer’s contribution and the measures for benefits to be allocated if an employee leaves the plan. If you are part of a plan, it is important that you are familiar with the rules of your plan,” she added.
She also explained that members of pension plans should be given access to a member’s handbook to ensure that they are familiar with the rules of their pension.
“Each plan should also have a member’s handbook and it is where the trust deed and rules are shared in simple language. There may be legal terms and jargon that may not be familiar, but the member’s handbook will now explain it in a simpler manner that can be easily understood,” she said.
The JBDC is the Government’s business development agency that assists in the sustainable creation and development of MSMEs in Jamaica.