The Pension Industry Association of Jamaica (PIAJ) is calling for working Jamaicans to make financial planning for retirement one of their top priorities. This call by the PIAJ comes in the wake of the passage of the Tourism Workers Pension Act 2019, which will benefit tourism workers across the island early next year.
“The Tourism Workers Pension Act is a welcome addition to the legislative pension landscape,” said Sanya Goffe, president of the PIAJ. “This is a landmark initiative based on the unique features of the Tourism Workers Pension Scheme designed to take into consideration the seasonal nature of the industry. Additionally, the ability for a member of the scheme to automatically vest in all contributions made by or on behalf of the member is consistent with international trends that will see the shortening of vesting periods in many jurisdictions in the world.”
Welcoming the inclusion of tourism workers under the pension umbrella Brian Frazer, a director of PIAJ, said that the tourism sector has always been an important sector for Jamaica, and the scheme will provide workers within this sector with the benefit of setting aside funds for their retirement.
“For years these workers have been making a significant contribution to the growth of our economy but were not able to readily access this basic benefit,” Frazer said.
Both Goffe and Frazer agreed that the Tourism Workers Pension Act will be a catalyst to bring more workers across Jamaica into the pension net, and that it is a significant enabler that the scheme will be endowed with $1 billion over a period of four years, with members of the scheme gradually increasing their contribution from 3% to 5% over the prescribed time.
“The legislation is in line with the PIAJ’s mandate of increasing pension coverage in Jamaica,” Goffe said. “The potential to provide pension coverage to an additional 350,000 persons, based on the minister’s projection, will increase the industry coverage ratio. The total number of pension plan members as a percentage of the total employed labour force, which is currently at 9.8% of the working population, would increase to over 33%,” she said.
Goffe said that the oversight role of the Tourism Workers Pension Scheme by the Financial Services Commission increases the transparency and effective management of the scheme, which should ultimately redound to the benefit of the members of the scheme.
The PIAJ, which recently changed its name from Pension Funds Association of Jamaica in order to better reflect its diverse membership base, is a non-profit organisation with the primary goal of advancing public knowledge and understanding of matters relating to pension plans and their relevant stakeholders, lobbying for changes needed to improve the regulatory and legislative framework for the operation of the pension industry in Jamaica.