A call for action on radical growth of NIS pension roll
Chairman of Victoria Mutual Pensions Management Dr Judith Robinson is proposing that the Ministry of Labour & Social Security set a national target to radically increase the number of persons covered under the National Insurance Scheme.
"We need to move beyond the paltry 10 per cent of the elite who are entitled to some kind of retirement benefit," she said. "They should set about doing this as soon as possible."
Referencing September 2017 statistics from the Financial Services Commission, which show that private pension coverage stood at 9.45 per cent of the employed labour force, Robinson said "personally I am troubled - perhaps aggrieved would be a better word - by the low enrolment in pension schemes.
"Let us spare a thought for those hundreds of thousands of persons who work hard for their entire lives and yet have no retirement plan, no periodic predictable source of income on which to live," she said while addressing VM's annual retirement seminar on Tuesday.
"They depend on their families, on charity and the largesse such as it exists of religious and social bodies and corporate social programmes. They receive no structured old age support which could make them feel independent," Robinson said.
With regard to the NIS, Robinson said she remembered the 1960s when the agency was introduced and what she thought were unnecessary deductions by her employer towards the scheme.
She also recalled what she described as a kind of buzz that overtook those who worked in the informal sector as household helpers, shop clerks, gardeners and others and who were persuaded to make minimum contributions with or without the assistance of their employers by buying NIS stamps to be affixed to their NIS stamp cards.
"Old people like me meet many of these persons collecting their old age pensions when we go to the post office, a wonderful social ritual. Whenever we go we meet all kinds of people. And we go there periodically to collect our own old age pension - no deposit into the bank for us; we like to go to the post office," said Robinson.
She said she related those anecdotes to highlight two points: a lack of advertisements promoting membership in the National Insurance Scheme; and the difficulty in making periodic contributions.
"What is being done to bring NIS contributions, payable by informal sector workers in the technological age?" she asked. "Is there any reason why we cannot begin to develop a system to make payments via mobile telephone, for instance?"
She urged the labour ministry to set devising ways to increase the number of persons covered by pensions as soon as possible.
Minister of Finance and the Public Service Dr Nigel Clarke who also spoke at the seminar acknowledged that it was in Jamaica's and the government's interest "to enact policies that can lead to a broadening of pension coverage both privately and publicly."
He said the first phase of private pension reform was completed in 2004, some 14 years ago, and that it is the government's intention that the second phase, which will have such provisions as vesting and portability, will be enacted in fiscal year 2019/20.