Pension or retirement benefits are payments made to individuals under predetermined legal or contractual terms and are an important investment to make if you are trying to secure a comfortable retirement future. What are your pension plans?

The retirement age in Jamaica is 65 years old, and according to the Pension Act, a retiree can start receiving their pensions “on or after attaining the age of 55 or in special circumstances age 50 with the approval”.

Private pension plans

The private sector pension industry is regulated by the Financial Services Commission (FSC).

There are two types of funds in this industry, and they are approved retirement schemes (ARSS) and approved superannuation funds (ASFS).

Membership in ASFS is limited to those employed by employers that have set up superannuation funds for their employees.

Unfortunately, most companies have not provided pension plans for their employees. ARSS are available to self-employed individuals and employees who are ineligible to participate in their employer’s pension plan or do not have a superannuation fund.

It is also important to note that both the ASFS and ARSS provide the same tax benefits as the National Insurance Scheme (NIS).

Personal voluntary pension

Self-employed individuals; employees who are not active members of an approved superannuation fund (SF); and employers who have not set up an approved Superannuation Fund (SF) for their employees

An ARS must be registered and approved by the FSC. In addition, these schemes can only be set up by a registered life insurer or a licensed Investment Manager.

Contributions

The annual rate of contribution by each member cannot exceed 20 per cent of pensionable salaries.

Employers of individuals who make payments to an approved RS are exempt from contributing to the scheme, in contrast to an approved SF. But, they could choose to do it voluntarily. The overall amount of a member’s payments, should the employer choose to make one, cannot surpass twenty per cent of pensionable salaries.

Plans are defined contributions in nature, with benefits paid out as a pension or an annuity.

Registered/approved retirement schemes:

1. Barita Individual Retirement Scheme

2. BPM Personal Pension

3. FHC Retirement Scheme

4. Retirement Scheme for Members of the City of Kingston Co-operative Credit Union

5. Guardian Retirement Scheme

6. JMMB Retirement Solutions

7. Jamaica National Individual Retirement Scheme

8. Mayberry Investment Limited Retirement Scheme

9. VM Pensions Management Limited

10. The PROVEN ROCK Retirement Scheme

11. Sagicor Lifestyle

12. Scotia Bridge

13. Smart Retirement Plan