Senior International Monetary Fund (IMF) Representative to Jamaica Dr Gene Leo, has called for pension fund managers to take on more risks to yield higher returns, while exercising good governance.

Leon, who was the keynote speaker at the Sagicor Pension Investment Seminar held last Wednesday at the Jamaica Conference Centre, said that the challenges in the Jamaican economy represent opportunities for prosperity, by carefully identifying areas for investment in anticipation of an uptick in the future.

At the same time the IMF representative contends that the “financial sector risk appears to be contained”.

Good corporate governance, once seen as a constraint, can lead to the enhanced returns, by his reckoning.

Exercising good governance as “top priority can lead to increased wealth”, Leon said. The model of governance is a self-regulatory guideline that can be a cost saving measure as it removes the need for any outside monitoring agencies.

Leon emphasised the need for monitoring the compensation offers for fund managers saying they need to be based on an adjusted risk returns incentive. In addition, he recommended appointing only independent board members to reduce conflicts of interest.

Richard Byles, President and CEO of Sagicor Life Jamaica who also spoke to the gathering of Pension trustees at the Seminar, outlined the financial health of funds managed by the institution and commended the investment team on the 2010 performance of these pension funds.

“Our funds did very well versus inflation, eight out of nine of our funds beat inflation,” Byles said.

Despite the challenging environment of low interest rates, the Sagicor Life Jamaica pension portfolio has shown positive returns.

Sagicor Life Jamaica Limited is the leading life and health insurance and pension Management Company in Jamaica. The Company holds group pension plans, with funds of $69 billion under management, making Sagicor the industry leader in the pension funds management by a life insurance company in Jamaica.