On Friday, July 10, 2026 the Senate debated The Pensions (Superannuation Funds and Retirement Schemes) (Registration, Licensing and Reporting) (Amendment) Regulations, 2026. The debate focused not only on the regulations themselves, but also on the broader question of how Jamaica’s pension system should evolve to better serve both contributors and the country’s development needs.

Among the changes debated were the recent amendments increasing the limit on pension fund investment in private assets from 5 per cent to 7.5 per cent, and ultimately 10 per cent. These are positive and necessary reforms that have been advocated for over several years by stakeholders across the financial services sector, including the Pension Industry Association of Jamaica (PIAJ), the Jamaica Securities Dealers Association (JSDA), and other industry participants.

I welcomed these amendments during the debate because they represent an important step forward. But they should also be seen for what they are — the beginning of a much broader journey.

Pension reform is often viewed as a technical issue that concerns regulators, trustees, and investment managers. It is however much more than that. Every month, thousands of Jamaicans set aside part of their income with the expectation that, after decades of work, those savings will provide security and dignity in retirement.

Allowing pension funds to invest in a broader range of carefully selected assets creates greater opportunity for diversification and can improve long-term returns for the level of risk being taken. Over time, that benefits the very people whose savings those funds are entrusted to manage.

But there is potentially an equally important national benefit. When pension savings help finance housing, renewable energy, roads, water infrastructure, hospitals, and productive businesses, Jamaicans benefit not only as investors, but also as citizens. More investment means more jobs, stronger communities, improved public services, and a more resilient economy.

These reforms are not simply about financial markets. They are about the potential to improve the lives of the Jamaican people.

THE BIGGER PENSION CHALLENGE

While the amendments are welcome, they also shine a light on a much bigger issue that deserves far greater national attention: Too few Jamaicans are saving for retirement through formal pension arrangements.

According to the latest data from the Financial Services Commission (FSC), Jamaica has approximately 174,000 active pension plan members. Against a labour force of roughly 1.4 million people, that means fewer than one in every eight working Jamaicans is actively participating in a formal pension arrangement. That statistic should concern all of us. It means that well over one million working Jamaicans are not building retirement savings through a formal pension plan.

If that trend continues, many Jamaicans will eventually retire without a reliable source of income beyond whatever personal savings they may have accumulated. In many cases, the responsibility for their financial support will fall on their children and grandchildren. In others, it will inevitably increase demands on the State through social assistance and other public support programmes.

Neither outcome is desirable. Encouraging greater pension participation is therefore not simply a financial sector objective, it should be a national economic and social priority.

The amendments debated address one important aspect of the investment framework, but they do not complete the wider pension reform agenda.

For many years, Jamaica has contemplated a broader, second phase of pension reform aimed at improving pension coverage, strengthening retirement adequacy, enhancing portability for workers who change jobs, modernising governance arrangements, and continuing to update the rules governing how pension funds invest.

Those reforms have remained outstanding for far too long. Every year that passes without completing them is another year in which many Jamaicans remain outside the formal retirement system or continue participating in a framework that has not fully kept pace with today’s labour market and investment environment. If we genuinely want more Jamaicans to save for retirement, then the system itself must become more modern, more flexible and more responsive to their needs.

The timing of these reforms could not be more significant. Jamaica faces substantial financing needs in housing, infrastructure, climate resilience, energy, logistics, and other sectors that will shape our future progress. Government resources alone cannot meet those demands. Fortunately, Jamaica already possesses one of the ingredients required for success, long-term domestic savings. Pension funds are naturally suited to financing long-term projects because they manage money that, in many cases, will not be needed for decades.

Jamaica would not be breaking new ground by enabling pension funds to play a larger role in financing the real economy. Canada and Australia have, for decades, used professionally managed pension capital to invest in infrastructure, real estate and productive businesses. These investments have helped deepen their capital markets while supporting long-term returns for contributors. In developing markets, countries such as Namibia have also used carefully designed rules to channel pension savings into energy, water, telecommunications, and other areas of national development.

The lesson is not that pension funds should be directed into projects simply because they serve a public policy objective. Pension savings must always be invested prudently and in the best interests of contributors. But in projects are properly structured, independently assessed and commercially sound, pension capital can support both retirement security and national development.

The recent amendments create greater capacity for Jamaican pension funds to participate in these investments. However, more remains to be done: The investment framework should continue to evolve away from the current approach of grouping all private assets within a single category, regardless of their underlying characteristics or level of risk. A venture capital investment in an early-stage company, for example, is fundamentally different from an investment in a well-structured bond financing a power plant or other critical infrastructure. Yet, under the current framework, both may fall within the same private asset limit.

That approach is too broad. The framework should move toward distinguishing between different types of private investments based on their risk profile. Consideration should be given to creating separate categories for development assets such as infrastructure bonds and project-finance instruments, particularly where they are supported by stable revenues and strong contractual arrangements.

At the same time, Jamaica must continue improving the way major projects are prepared and structured. Long-term capital will only flow where there are well-designed, commercially sound opportunities capable of giving investors confidence. Unlocking capital and creating investable projects must go hand in hand.

One of the most encouraging features of the recent reforms has been the constructive engagement among policymakers, regulators, and industry participants. That approach should now be deepened. The PIAJ, JSDA, and other stakeholders stand ready to support the next phase of reform with both practical experience and technical expertise. The Ministry of Finance and the Public Service and FSC should continue to engage the industry.

As Jamaica’s economy and financial system evolve, the rules must evolve with them. The objective is not deregulation; it is smarter regulation.

More Jamaicans must be encouraged to participate in pension plans. The broader pension reform agenda must be completed. The investment framework must continue to evolve responsibly. And we must build a pipeline of well-prepared projects capable of attracting long-term domestic capital.

If we do those things we will achieve far more than stronger financial markets. We will strengthen retirement security, finance national development, create employment, reduce our dependence on external capital, and build a more resilient Jamaican economy. That is the real promise of pension reform and it is a promise worth completing.

Ramon Small-Ferguson is the CEO of Barita Investments Limited, president of the Jamaica Securities Dealers Association, Senator, and deputy Opposition spokesperson on finance.