THE Senate on Friday approved amendments to the regulations governing pension schemes to allow them to increase the investment limit for private equity from five per cent to 7.5 per cent, with a further increase to 10 per cent by April 2027.

There was bipartisan support for the measure that Government and Opposition senators said will unlock investment opportunities, ultimately leading to economic growth.

However, there was concern from Opposition members about the small percentage of Jamaican workers enrolled in pension schemes.

“Pension policy is, ultimately, about protecting the dignity, financial security and independence of Jamaican workers in retirement. Every reform should be measured by one simple question: will it improve retirement outcomes for Jamaican workers?” said Government Senator Kavan Gayle during his contribution to the debate.

Gayle noted that with longer life expectancy, rising health-care costs and changing employment patterns, a strong pension system is more important than ever.

“It promotes higher participation in retirement savings, greater financial security, increased national savings, stronger domestic investment, and reduced dependence on families and the State,” he said.

Gayle noted that as of September 2025, Jamaica’s pension industry managed approximately $847 billion in assets. He said increasing the allocation to 7.5 per cent could make more than $21 billion available to support Jamaican businesses, infrastructure, innovation, entrepreneurship, and job creation.

Gayle told the Parliament that while these regulations are an important milestone, they should form part of a broader programme of pension reform.

He said priority should be given to expanding pension coverage, particularly for workers in the informal sector, agriculture, domestic work, and small businesses. He also called for increasing investment diversification while maintaining prudent safeguards; introducing pension portability so workers retain their retirement savings when changing employers; establishing a maximum five-year vesting period to better reflect today’s labour market; and allowing limited, carefully regulated access to pension savings during genuine emergencies.

“This Government believes that pensions are not merely financial instruments; they are pillars of social stability, economic resilience, and a better quality of life for generations to come,” he said.

A trade unionist, Gayle said consideration should also be given to automatic pension enrolment. He said international experience shows that automatically enrolling eligible employees — while preserving the right to opt out — significantly increases participation rates.

There is a low rate of participation in pension schemes by Jamaican workers with only 174,000 enrolled in a scheme.

“Automatic enrolment would encourage earlier retirement savings, reduce old-age poverty, strengthen national savings and improve retirement income security for future generations,” said Gayle. He shared that the proposal has already received approval from the Government and Cabinet submissions are to be drafted.

Opposition Senator Kisha Anderson pointed to the low rate of participation in pension schemes by Jamaican workers, highlighting that only 174,000 were enrolled in a scheme — representing 12 per cent of the employed labour force. She also noted that there were 820 pension plans with only 358 being active. She cited that of the active plans, there are 343 superannuation funds and 15 retirement schemes.

According to the JMMB executive, the low level of participation in pension schemes indicates that Jamaicans are either choosing not to save or they can’t afford to save towards their retirement.

“It means in the long term the Government will be responsible for creating that social safety network that will be required,” she stated.

Emphasising that not enough Jamaicans are planning for their retirement, Anderson said, “to think 174,000, I don’t know if it’s not shocking to anybody else but it’s really shocking to me”. She told her fellow lawmakers that the level of outcry from older Jamaicans about being unable to make ends meet means “if we don’t do something now it’s going to be social programmes in the years to come and we do have an ageing population”.

“If Jamaicans don’t invest, the Government will have to offer more support,” she warned.

Her fellow Opposition Senator Ramon Small-Ferguson also pointed to the low level of participation of Jamaicans in pension plans as a cause for concern.

“Truth is that low participation in saving for retirement ultimately becomes like a cancer on the society, as people getting to retirement with no ability to take care of themselves ultimately become some version of a burden on the State and the generations that follow them,” he said.

In supporting the amendment, Small-Ferguson noted that allowing pension funds the ability to invest in a broader range of assets creates diversification in the portfolios in which pensioners invest.

“There is the ability for stronger returns,” he said, while highlighting that currently the largest asset class is Government of Jamaica debt. “So this move will allow for greater diversification, over time, and I think that matters for the workers and ultimately the retirees,” Small-Ferguson said.

He said it also matters for the wider country as billions of dollars are waiting to be mobilised for investment in housing, infrastructure, energy, and productive businesses, ultimately, leading to sustained economic growth.