Tourism Minister Emphasises Significance of Pension Scheme

Minister of Tourism, Hon. Edmund Bartlett, says the pension scheme for tourism workers is a commitment by the Government to make sure there is social security and protection for workers in the sector.

The pension scheme, which is expected to come into effect early 2020, is a defined contributory plan supported by legislation, and will require mandatory contribution by workers and employers.

It will cover all workers from 18 to 65 years in the tourism sector, whether permanent, contract or self-employed. Benefits will be payable at age 65 years or older.

“The move is to ensure that we create that social security arrangement so that on retirement, the tourism worker from whatever category can be assured of a minimum pension,” the Minister said, while addressing a JIS ‘Think Tank’ on August 16.

Mr. Bartlett pointed out that the scheme will embrace everyone in the sector, such as the red cap porters, craft traders and workers in accommodations, attractions, tour operation/transportation and watersports.

“We see too many workers who have toiled for years, some forty years, some fifty years and after they have left, they are in penury situations, so this move is to ensure that there is a social security net within the sector,” the Minister said.

A very important feature of the scheme, he added, is that a worker can become a member at age 59 and still be entitled to a pension similar to the persons who would have been there from the initial stage.

“This feature is possible because the Government decided to put $1 billion from the Tourism Enhancement Fund (TEF) into the scheme to seed the fund and create a base, so that those who have been contributors for only five years can still get a pension that is equal to a minimum of $200,000 a year,” Mr. Bartlett explained.

For the first three years after the commencement of the pension scheme, the contribution will be three per cent of gross salary to be matched by the employer and five per cent thereafter.

Self-employed tourism workers will pay three per cent in the first three years and five per cent thereafter.

“The contribution should start the minute you are employed full time, then it kicks in as the law is making this a compulsory pension arrangement that requires everybody to join and every employer to participate,” the Minister said.

“You can join and move from one company to  another without breaking your membership, as we know that in the tourism industry, persons move from one hotel to the next or move from being a hotel worker to being an entrepreneur and still providing services to the industry, so the scheme facilitates that,” he added.

The Tourism Workers’ Pension Fund will be managed by a Board of Trustees who will appoint an Investment Manager and an Administrator to manage the investment and the operations of the scheme.

The Fund will be tax exempt and regulated by the Financial Services Commission.