Business

More than half of Jamaica's registered pension funds inactive

BY DURRANT PATE
Observer business writer

Wednesday, November 20, 2019

Print this page Email A Friend!


More than half of the 807 registered pension funds and retirement schemes in Jamaica are inactive with most of them in the process of being wound up.

This disclosure was made by executives of the Pensions Industry Association of Jamaica (PIAJ) during the Jamaica Observer Monday Exchange last week.

President of the association, Sanya Goffe pointed out that just under 400 registered pension funds and retirement schemes are active in Jamaica.

She explained that most of the registered pension funds and retirement schemes have become dormant and are in the process of being wound up.

Goffe, an attorney by profession, estimated that about 390 are in the process of being wound up. The winding up of a pension fund or retirement scheme is a process, which results in the distribution of the assets of that fund or scheme to beneficiaries.

Pursuant to the Pensions Act, a fund or scheme can be wound up either voluntarily by the trustees of the fund or scheme or by a court petition from either the trustees or the Financial Services Commission, which regulates the pension industry worth more than approximately $700 billion.

Goffe explained that while these inactive pension funds and retirement schemes are still on the books, their investment portfolio is still active and earning returns for beneficiaries.

The PIAJ President made the point that they (pension funds and retirement schemes) cannot be readily wound up until all issues relating to the distribution of the residual balance in the pension fund or retirement scheme is sorted out.

One of the primary reasons for the delay in winding up some of these inactive pension funds and retirement schemes is the fact that many beneficiaries have not come forward to claim or cannot be located in order to start the process of distributing the balances in the fund or scheme.

In the meantime, pension fund managers have attributed the winding up of some 400 pension schemes by firms in Jamaica over the last 10 years to the burdensome costs of managing the pooled contributions on behalf of the companies and their employees. They pointed to smaller firms that cannot manage their own pension funds and therefore have to outsource a process that is expensive.


Now you can read the Jamaica Observer ePaper anytime, anywhere. The Jamaica Observer ePaper is available to you at home or at work, and is the same edition as the printed copy available at http://bit.ly/epaperlive


ADVERTISEMENT




POST A COMMENT

HOUSE RULES

1. We welcome reader comments on the top stories of the day. Some comments may be republished on the website or in the newspaper � email addresses will not be published.

2. Please understand that comments are moderated and it is not always possible to publish all that have been submitted. We will, however, try to publish comments that are representative of all received.

3. We ask that comments are civil and free of libellous or hateful material. Also please stick to the topic under discussion.

4. Please do not write in block capitals since this makes your comment hard to read.

5. Please don't use the comments to advertise. However, our advertising department can be more than accommodating if emailed: advertising@jamaicaobserver.com.

6. If readers wish to report offensive comments, suggest a correction or share a story then please email: community@jamaicaobserver.com.

7. Lastly, read our Terms and Conditions and Privacy Policy



comments powered by Disqus
ADVERTISEMENT

Poll

ADVERTISEMENT
ADVERTISEMENT

Today's Cartoon

Click image to view full size editorial cartoon
ADVERTISEMENT