THE subject of decent retirement for domestic workers was brought to my attention last week by a colleague. She was concerned that a number of domestic workers enter retirement without any replacement income, after working in their profession for many years.

Some domestic workers contribute to the National Insurance Scheme (NIS), which provides a pension benefit after age 65. However, with the increasing cost of living, domestic and other workers cannot live comfortably in retirement solely from an NIS pension. Decent work refers to quality jobs, dignity, equality, fair income and good working conditions. The International Labour Organization (ILO) advocates for “decent work” for domestic workers, but what about a decent retirement too? My colleague questioned whether domestic workers could contribute to a private pension plan so that they could enjoy a better standard of living in retirement.

Domestic workers should be encouraged to participate in a private pension fund as other workers in the formal economy. I do have pension clients who are domestic workers. In some cases, the workers are encouraged by their employers to plan for retirement and the employers make matching contributions to their pension accounts. I applaud those employers who have taken the initiative to ensure that these employees plan for their future. There are domestic workers, who, through financial literacy have taken the necessary action to put a plan in place for retirement, which includes having personal pension plans, whether or not their employers make contributions. These workers know that their financial future is not in their employers’ hands as they are aware of the need for stable, predictable, and reliable pension income that will allow them to maintain a decent standard of living, especially if they live many years in retirement.

Domestic workers should be empowered to save and invest. The small amounts add up over time. Saving a minimum of $6,000 per month ($1,500 per week) at an average of interest rate of eight per cent per year can yield $3.5 million in 20 years. It’s always important to begin with an affordable amount and make a steady increase over time. With personal pension plans, there is a maximum contribution ceiling of 20 per cent of the workers’ gross salary. But with investment plans, there are no ceilings. A pension account can be opened with as little as $2,000.

I recommend that domestic workers supplement their pension funds by investing in unit trusts, and mutual or pooled funds. The risk is less when compared to buying individual stocks. Domestic workers can also invest in the stock market. However, a diversified portfolio of assets is advisable. The help of a competent financial advisor will prove invaluable to domestic workers who want to maximise the return on their investments both for short-term and long-term goals.

Over the years, there have been many stories of domestic helpers whose working life came to an end with just a goodbye and best wishes. They entered a new phase of life with much uncertainty as they no longer had access to the home that was their workplace. The family they have grown to love has no more room for them. In some situations, the employer and the domestic worker are retiring at the same age and time. Some of these domestic workers have worked overtime without extra pay or fringe benefits.

Domestic workers are defined as those workers who work within households or for households on a professional basis. These workers are known as members of “the care economy”, providing care services to private households. The Jamaica Household Workers’ Union (JHWU) should lobby for pension provision for domestic workers, who contribute to the growth of the economy and deserve to have a “decent” retirement. It’s fine to advocate for decent work, but all workers should plan for their retirement regardless of whether they are low-, middle- or high-income earners. The standard of living of the poor and the marginalised matters, especially in an ageing global society. Domestic workers’ jobs are essential and form the backbone of the economy as they make the jobs of many other workers possible.Globally domestic workers are likely to live in poverty than other workers and the fact that domestic jobs are projected to grow faster than jobs in other sectors, policymakers and lobbyists should give focused attention to the economic well-being of domestic workers.

Grace G McLean is a financial advisor and retirement specialist at BPM Financial Limited. Contact her at: gmclean@bpmfinancial or visit the website: www.bpmfinancial.com. She is also a podcaster for Living Above Self. E-mail her at livingaboveself@gmail.com