THE Government is looking at Jamaica’s pension and insurance funds as a potential source of financing for post-Hurricane Melissa reconstruction, opening a sensitive debate over how far the country should lean on contributors’ long-term savings to rebuild after disaster.

Following recent reforms announced by Finance Minister Fayval Williams, pension funds and insurance companies are now being given greater flexibility in how they invest, including a phased increase in the share of assets that can be invested in private companies, along with expanded foreign currency exposure limits.

“We must mobilise Jamaica’s own savings — the long-term capital funds held in pensions funds and insurance companies — to help finance the infrastructure backbone of the nation’s reconstruction,” Prime Minister Dr Andrew Holness said during his keynote address at the Pension Association of Jamaica (PIAJ) annual luncheon last week.

“These reforms are not about recklessness; they are about allowing pension funds and insurance companies to diversify responsibly, strengthen long-term returns, and participate more meaningfully in Jamaica’s development,” he continued.

The move is intended to allow pension funds to adapt in a way that preserves long-term security while providing carefully designed flexibility during periods of national or personal crisis, noting that a balance must be maintained. Holness maintained that pension funds must still effectively perform their investment function, with contributors needing confidence that their savings are being managed prudently, professionally and with a long-term view, and this will require strong governance, capable trustees, clear investment policies, transparency, proper valuation, and strong regulatory oversight.

“The objective is not to force pension capital into national development. The objective is to create bankable national development projects that pension capital can responsibly support,” he reasoned.

At the same time, he warned that a pension system that is too narrowly defined will not be able to deliver the diversification, returns, and resilience contributors need over their working lifetime.

“Prudence must not become paralysis,” he warned.

Pension capital, according to Holness, is naturally suited for long-term investments such as infrastructure, housing, and other productive enterprises — once those projects are properly structured, commercially sound, and aligned with fiduciary responsibilities. The issue of pension funds taking greater stakes in alternative assets was also raised earlier this year by Sygnus CEO Berisford Grey during the 2026 Jamaica Stock Exchange Regional Investments and Capital Markets Conference. Grey called for pension fund managers across the Caribbean to allocate more capital to areas such as infrastructure, renewable energy, private equity and real estate, noting that these investments can generate stable long-term cash flows that align with pension obligations. He also questioned why Caribbean pension funds were not taking larger positions in similar regional assets. However, pension funds had remained limited in what they could invest in prior to reforms announced by Finance Minister Fayval Williams during the 2025/26 Budget Debate in March 2025. With this broader approach to pension investments, the Government is now turning its attention to Jamaica’s reconstruction needs in the aftermath of Hurricane Melissa. A preliminary World Bank assessment placed physical damage from the hurricane alone at about US$8.8 billion — excluding wider economic losses and recovery costs — an amount the Government has acknowledged cannot be financed on its own. While the Government says it will utilise concessional financing, climate and resilience funding, and public-private partnerships, it also intends to mobilise domestic savings held in pension funds and insurance companies. According to Holness, many of the projects tied to national reconstruction and resilience will create long-term public assets capable of generating stable and reliable income streams over time, describing that as the “sweet spot” for pension funds and arguing that there must be a channel for pension capital to participate in reconstruction infrastructure.

“That is how mature economies develop — they convert savings into investments, investments into infrastructure, infrastructure into productivity, [and then] they convert productivity into high wages and higher living standards,” he said.

Using TransJamaican Highway as an example of the type of infrastructure investment pension funds could support, Holness pointed to the company’s performance since listing on the Jamaica Stock Exchange in 2020. The Government, through NROCC, initially sold 80 per cent of its stake in TransJamaican Highway Limited to the public as part of the company’s IPO in February 2020, before later divesting its remaining 20 per cent stake through another public offer in 2025. Since listing at an IPO price of $1.41 per share, TransJamaican Highway’s stock has climbed to between roughly $6.20 and $6.90 in 2026, representing gains of approximately 340 to 390 per cent, excluding dividends.

“Infrastructure, when commercially viable and properly governed, can be both a development asset and an investment opportunity,” Holness asserted.

The prime minister, however, cautioned that pension funds should never be viewed as a convenient pool of money for weak or poorly structured projects, stressing that contributor savings must remain protected. He noted that any investments involving pension capital must be driven by prudence, value, governance, risk management and long-term suitability, while making it clear that the Government’s intention is not to force pension funds into national development projects, but instead to create bankable infrastructure and development projects that pension capital can responsibly support.

HOLNESS…we must mobilise Jamaica’s own savings — the long-term capital funds held in pension funds and insurance companies — to help finance the infrastructure backbone of the nation’s reconstruction (Photo: Naphtali Junior)

PIAJ President Sanya Goffe in discussion with Prime Minister Andrew Holness during the Pension Industry Association of Jamaica’s annual luncheon in Kingston last week, where discussions centred on the roll-out of new phases of pension reform and expanding investment flexibility within the sector. (Photo: Naphtali Junior)