Little savings for retirement

Executive director of the Financial Services Commission (FSC) Rohan Barnett made a startling revelation that only five percent of Jamaica’s workforce is saving for retirement, a figure that does not correlate with the nation’s aging population.

“Population aging presents significant challenges not only for each country’s health and social security systems, but more importantly for individuals who must find resources to help themselves as they get older” the FSC executive director revealed at the International Organization of Pension Supervisors and Caribbean Regional Workshop on Private Pension Supervision.

In his presentation he argued that of the approximately 241,000 elderly persons in Jamaica, only 123, 329 are receiving some form of retirement benefits. In this breath, Barnett used the opportunity to urge youths to start to plan and save for retirement and confessed that as regulators there is a need to facilitate a more robust pensions industry.

One of the things that have been at the forefront for the FSC is the implementation of a national financial literacy programme geared towards highlighting the importance of retirement savings and the need to have post-employment income when one retires

“Creating an environment that enables growth in the demand for pensions services as well as supply of pensions by corporate entities and promoting stability and public confidence in the pensions sector are some of the ways we as regulators can facilitate the development of the pensions industry” he explained.

Meanwhile, the current global economic crisis that has seen some 30,000 jobs cut locally will have an impact on the country’s NIS system in the long run. According to Barnett “less jobs leads to less funding of the NIS, which as an ultimate result, leads to a reduced pool of resources to support retirees in their latter years”.

However in overcoming that task he suggested in managing the NIS assets you place the them into products that will generate significant amount of returns to offset the fallout in terms of the volume of NIS contributions.