PIAJ: Employers not asked to contribute under proposed automatic pension enrolment

 

The Pension Industry Association of Jamaica (PIAJ) has sought to assure employers that the push for legislation to facilitate automatic enrolment in a pension scheme will not include a recommendation for them to contribute to the arrangement. 

 

The association has served notice that it will be exerting pressure for the passage of legislation to offer more protection for Jamaicans after retirement, after highlighting that fewer than 20% of the working population are enrolled in a pension scheme. 

 

PIAJ Director Desmond Johnson says the situation is urgent, as Jamaicans are generally living longer, which raises the risk of dependency for the provision of social security, health care and other services. 

 

"You're talking about 1.5 million persons employed approximately, and less than 20% of those are in a pension arrangement. If you do have auto enrolment, then that will help that situation. The employers will have to ensure that persons are actually enrolled in a formal pension arrangement. Now, the employer doesn't have to contribute. We're not asking the employers to contribute to cause an additional expense. What we are saying is that you should...facilitate the arrangement. This, I think - this we know - will drastically improve the pension coverage across Jamaica," Mr. Johnson maintained.

 

The association also wants the government to fast-track legislation related to micro pensions, so more workers and self-employed people can also save towards a pension. 

 

"That will also help to improve and to solve the problem that we have now. Well, not totally solve, but at least more persons will be less dependent on their family members and the government. If this doesn't happen, then it's going to be a serious economic and social problem for both the government and for the persons who are retired who do not have a pension arrangement. They'll be relying on NIS. And NIS normally is for those who are in the formal sector. If you're formally employed, you do NIS, but it's never enough. It should be a plus to a formal pension arrangement," he suggested.

 

Mr. Johnson was a guest Tuesday on TVJ's Smile Jamaica.