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Making retirement savings compulsory
Editorial
May 14, 2026

Making retirement savings compulsory

By 2050, nearly one in three Jamaicans could be over 60, according to the statisticians. What this rapid growth in the aging population portends is a crisis that is no longer just waiting to happen, with grinding old-age poverty vigorously beckoning.

Add to that unsavoury fact the abuse of seniors as part of daily existence in Jamaica, the spiralling cost of health care hitting especially the old and infirm, the reality of income insecurity, and less certainty of children being willing or in a position to care for their aged parents.

Against this backdrop, Prime Minister Dr Andrew Holness, a week ago, made one of his most important speeches — one that we in this space hope will be more than words from a politician but soon to become action.

Addressing the Pension Industry Association of Jamaica (PIAJ) annual luncheon in Kingston, Dr Holness announced that his Government is moving to strengthen the pension system by introducing auto-enrolment, aimed at expanding coverage, increasing retirement savings, and reducing old-age poverty.

“Many people intend to save… but the truth is they will delay. Many workers postpone action because the process feels complex and distant. Auto-enrolment changes the default. It makes participation the normal starting point while preserving choice,” he proposed.

Auto-enrolment in retirement savings, notably pension schemes, is one of those game-changers that Jamaica has been waiting for, with the prospect of passing on generational wealth, or at least reducing generational poverty.

The picture regarding the lack of provisions for retirement affecting a wide swathe of the population is dire. As of late 2025 the National Insurance Scheme (NIS) in Jamaica was catering for about 150,000 pensioners.

In addition to this, the Accountant General’s Department administers pension payments for over 33,000 government pensioners, while the recently introduced Social Pension programme covers over 12,000 to 16,000 elderly citizens, who qualify if they are 75 years or older, without a pension, and not receiving a government benefit. A year ago this month the Social Pension benefit was increased from $6,800 to $12,000 bimonthly.

In 2022, the International Labour Organisation (ILO) Regional Office for Latin America and the Caribbean found that the proportion of older people without labour income or pension increased from 31.9 per cent in 2019 to 34.6 per cent in 2020, and 34.5 per cent in 2021.

“Too many reach old age dependent on family support, limited savings, or the State. Too many younger workers still believe that retirement planning is something to be postponed until later. But later comes quickly, and when later comes without preparation it becomes a burden on the individual, on the family, and on the country,” the prime minister told his audience.

Dr Holness did well to emphasise that waiting for people to voluntarily participate in retirement savings would not cut it. However, he acknowledged the challenge in that people had the right to opt in or out of a pension arrangement, while noting that retirement security is a matter of national security and must be treated as a national priority.

One suggestion the prime minister might wish to consider is making pension payments more attractive by removing the applicable 25 per cent income tax requirement. This is way too much to take from a retiree’s payment.

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