JN Fund Managers (JNFM) is steadily carving out a share of the rapidly evolving pension fund management market, securing four new accounts in the past year, and increasing its business by more than 200 per cent, says general manager Keith Senior.

At the same time, there is a massive consolidation process underway in the pension industry where hundreds of funds are operating independently, he said. Reform of the private pension industry, ongoing for more than two decades, is now opening up a new market for fund management, which is being filled by organisations such as the JNFM.

“We are the new kid on the block,” Senior said. “We launched our pension fund services in July 2005, and we made sure to put a robust system in place with a very good staff,” he said. “Our goal was to help employees make adequate provision for retirement during their working years.”

JNFM, a wholly owned subsidiary of Jamaica National Building Society (JNBS), was licensed in 2000 and commenced trading shortly thereafter.

In addition to its pension administration and management services, JNFM also offers investment portfolio planning services, mutual fund products, the purchase and sale of government bonds and equities and credit facilities.

Senior explained that at March 31, 2000, three months following the Board’s decision to enter the securities business, the company closed its financial year with funds under management of J$195 million. Twenty-one months later, the company eclipsed the J$2 billion mark. Today, the company manages in excess of J$20 billion on behalf of its clients and its services are offered through licensed dealer representatives based at JNBS branches across the island.

The pension fund operation, the general manager noted, was started as opportunities opened in the market when the rules were changed to create a more competitive and transparent pension fund management environment.

“Out of the approximately 241,000 elderly persons in the island, only 123,329 are receiving some form of retirement benefits,” according to Rohan Barnett, executive director of the Financial Services Commission (FSC).

The Pension Funds Regulator further stated at a Regional Pensions Workshop, in Montego Bay, on October 8 that, “Only about five per cent of the labour force in Jamaica was currently saving for retirement.”

Data show that even in private pension schemes, many beneficiaries are earning less than the minimum wage. Barnett said, “The challenge is far too grave for it to be addressed by only the public sector; therefore, a sound private pensions industry is not only essential, but urgent.”

The FSC began its reform of the pension process in 1994, which initially involved the licensing and registration of pension schemes. The second phase of the reform process included the vesting of pension rights, and ensuring portability of pension funds, as well as the lock-in of contributors’ compulsory contributions, which is only now starting to bear fruit.

JN Fund Managers, is one of the beneficiaries of these changes in pension fund administration and management; and one of its newest clients, Tetley Tea Company (Jamaica) Ltd, welcomes the opportunity to access the service. Tetley Tea, based in Kingston, is the largest producer of tea in the English- speaking Caribbean.

John Mahfood, Tetley’s Director with direct responsibility for the Tetley fund, guided the selection process for his company’s 25- member pension fund.

“We put the management contract out to tender and evaluated several fund managers based on the expressed service that would be performed and the cost,” Mahfood said. “I felt that JN Fund Managers was a relatively new operation and would give us more personalise service.”

One important selling point was that JN Fund Managers is part of the JN Group, “which for safety was important”, he said. As a member of one of the island’s largest institutions, Tetley sees the fund manager as having enhanced economic depth.

“We previously managed the pension fund ourselves, therefore we are looking forward to see the difference that JNFM will make,” Mahfood said.

JNFM is now among the top six largest money managers in the island, based on its funds under management.