With Jamaica’s ageing population expanding, financial experts are recommending that strategic partnerships be forged among private sector financial services providers, the government, and other organisations to support and facilitate the population’s preparation for retirement.
Research has shown that persons over 60 years old constitute the fastest growing segment of Jamaica’s population.
An ageing population holds significant implications for Jamaica, notably the labour market and pension planning, the experts pointed out.
Dania Palmer, research manager at JN Fund Managers said private sector financial services providers often have specialised knowledge and experience in retirement planning and investment strategies, which can benefit the public sector.
Additionally, he said strategic partnerships facilitate the pooling of resources, which can then offer a broader range of retirement planning tools and services to the population.
“There is also room for collaboration in policy, which can lead to more effective and comprehensive retirement solutions and more relevant legal and regulatory requirements,” said Palmer.
“Partnerships can also improve the reach and awareness of retirement planning initiatives by combining marketing efforts and leveraging the government’s wide influence,” he added.
He also noted that careful consideration must be given to addressing potential challenges of these partnerships, to ensure alignment with public policy goals, protecting individuals’ interests, and promoting equitable access to retirement planning resources.
Fay Samuels, senior research analyst, also at JN Fund Managers, notes that partnerships could include collaboration on financial education initiatives and the development and administration of retirement savings plans, and other investment options and products, designed specifically for retirement planning.
Examples of this, she said, are the Tourism Workers Pension Scheme developed by the Ministry of Tourism and the Agri-Care Insurance Plan facilitated by the Ministry of Agriculture and Fisheries.
“Partnerships can also be forged that develop solutions that leverage technology to improve retirement planning and management. We can also have joint working groups focused on policy development for retirement-related policies and regulations as well as collaborative research,” she said.
RESTRUCTURE RETIREMENT PLANS
Palmer noted that another possible solution to the challenges posed by Jamaica’s ageing population could be the restructuring of retirement/pension plans, taking into consideration the impact of increasing life expectancy and the growing number of retirees, on traditional retirement plans.
“Restructuring retirement plans may involve adjusting the retirement age, increasing contribution rates, or exploring alternative models that ensure the financial viability of pension systems in the face of an ageing population, he explained.
“Another consideration is the use of flexible retirement options, which may include phased retirement, where individuals gradually reduce their working hours or transition to part-time employment while still receiving some retirement benefits. However, as the demography continues to change, retirement plans need to be regularly reviewed and adapt accordingly,” he informed.
According to data from the Planning Institute of Jamaica, Jamaica’s population is becoming top heavy, with the elderly population, that is, persons aged 65 and over expected to double by 2050 (that is, they will constitute almost 20 per cent of Jamaica’s population); the working age group, that is persons aged 15-64 years is expected to decline; and the child population, persons under 15 years will be stabilising at much lower levels.