State Minister Proposes Mandatory Pension System

Minister of State in the Ministry of Tourism and Entertainment, Hon. Damion Crawford, is proposing that a mandatory pension system be established in a bid to offset expenses at retirement for Jamaicans.

He bemoaned that decades of tax incentives on pension savings have failed to encourage Jamaicans to save for retirement.

“Enticement does not work, Jamaicans need a push.  Privatized, but mandatory pension for every employed Jamaican is one answer…a model under which no Jamaican can escape the promise of dignity in their old age and a process that will jumpstart the economy,” he said.

The State Minister made the suggestion while making his contribution to the 2014/15 Sectoral Debate in the House of Representatives on June 10.

Mr. Crawford said the initiative will foster a mushrooming of available capital that must find a destination for investment.

“This increase in investment-seeking capital will also reduce interest rates, therefore further increasing the economic activity both on the supply side through the access of funds for investments and on the demand side as it relates to access to funds for consumption,” he said.

The State Minister said such a pension plan reduces the dependent population, thereby increasing the consumption potential – a necessary variable for increased economic activity.

He emphasised that this is critical, as Jamaica has a fast growing population of persons over age 65.

“Without pension capacity, the strain on our already fragile social safety net will be catastrophic. The outcome is a growing population of persons over 65 years who live in abject poverty,” Mr. Crawford said.

He pointed out that less than 15 per cent of Jamaicans have any pension arrangements at all.