Only 18 per cent of Jamaican workers are currently in a pension arrangement, a figure  which needs to be increased if the country is to avoid a high rate of poverty among an ageing population in the future, according to local experts in the pensions industry.

Sonya Goffe, President of the Pensions Industry Association of Jamaica (PIAJ) said the organisation’s mandate is to advocate for an increase in the number of Jamaicans who will receive a pension and to educate persons about the importance of having a pension plan.

“Right now only 18 per cent of the working population has a pension arrangement. We want to move that to a much higher figure”, Goffe told Loop News.

The PIAJ is a non-profit organisation made up of stakeholders in the pension industry, including pension plans, investment managers, actuaries, law firms, trustees and sponsor companies.

It hosts a number of financial literacy programmes, including workshops, seminars and publishing articles “so that people understand the importance of retirement security and financial resilience”.

Goffe noted that the number of private sector workers with pension arrangements has fluctuated between nine and 11 per cent for decades. She said with a number of public sector workers recently reclassified as permanent staff, the number with pension arrangements is likely to increase. 

Goffe underscored the importance of Jamaicans taking their pension arrangements seriously.

“As Jamaicans in general we do believe in savings, but as for saving for retirement in formalised arrangements where we get the tax breaks, that is something we need to be more tuned into”, Goffe stated.

“Casual savings is good for here, and how, but it’s never too late or early to start saving for retirement. Old age poverty is real. I know a lot of older persons who did well during the working years, and it’s when they reach retirement they realise they don’t have enough money because they did not think about it” Goffe noted.

She also cautioned about the popular view of many Jamaicans that “your pickney is your pension”, meaning that children are responsible for the financial needs of their ageing parents.

 “That generational pressure creates intergenerational dependence and sometimes exacerbates intergenerational poverty. We want to break that cycle”, Goffe said.

Lisa Soares Lewis, director of the Pensions Industry Association of Jamaica (PIAJ), presents a gift basket to Dr David Kaplan, lead labour market specialist of the Inter-American Development Bank at the PIAJ’s annual luncheon recently.

At the PIAJ’s annual luncheon last Thursday, July 13 in Kingston, guest speaker Dr David Kaplan, lead labour market specialist of the Inter-American Development Bank (IDB) spoke of the theme “designing a multi-pillar pension system for a high informality environment”.

Dr Kaplan discussed the possibility of introducing a universal pension for all workers, with the exception of the very rich. One option would be to have a pension made up of contributions from workers’ salaries as well as from the government.

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