The retirement journey: Claiming retirement benefits

The Shipping Association of Jamaica (SAJ) celebrates its 85th anniversary this year. To empower its members, Shipping Industry continues its retirement planning series focusing from early career stages to retirement, as a helpful member benefit.

Claiming retirement benefits in Jamaica involves navigating a structured process designed to ensure that individuals or their survivors /beneficiaries receive a guaranteed lifetime income in the event of old age, disability or death, whether they worked in Jamaica or abroad.

After identifying their sources of retirement income, one should first start from the foundation – the state benefit plans of National Insurance Scheme (NIS) and National Housing Trust (NHT), said Sandra Passmore-Rowe, partner at Milestones and Lifestyle Planning Services.

Both are mandatory contributions and while all employed and self-employed persons between the ages of 18 and 70 can contribute to NIS, contributors must have made a minimum of 520 weeks of contributions to be eligible for retirement benefits, including old-age pension, invalidity pension, funeral grants and widow/widower’s pension. NIS pensioners are also able to benefit from the health insurance plan, NI Gold, which provides medical coverage such as doctor’s visits, prescription drugs, diagnostics, etc, Passmore-Rowe said.

At age 65, upon the happening of one of the three life events, the NHT provides a benefit called a Special Contribution Refund. There are specific requirements to claim the refund, such as an original probated will or letters of administration when the contributor is deceased, and in the case of a disabled contributor, the person must be certified as an invalidity pensioner by NIS. Both organisations can be approached for more information.

If you are a member of an approved superannuation fund (ASF) or approved retirement scheme (ARS) and old age, disability or death has occurred, you or your survivors/beneficiaries are eligible to claim benefits once you have satisfied the vesting requirements according to the ARS Master Trust Deed & Rules (MDT&R) or ASF Trust Deed and Rules (TD&R).

So, it is extremely important that every employee check with their human resources or employee benefits department for the approved plan’s TD&R or to determine whether they are vested upon voluntary or involuntary termination, advised Passmore-Rowe. The benefits payable from these plans are not at the discretion of the trustees, as it is the provisions in the plan rules which matter to avoid a breach of trust.

For many people, personal savings and investments, which include life insurance, are a priority to achieve one’s personal goals. Once an employee knows their options upon termination of employment, their group health, life and accidental death and dismemberment insurance plan benefits can be claimed at death, disability or old age by the beneficiary, especially if the plan provides for post-retirement benefits.

If you worked abroad for any period, whether part-time or full-time, you or your survivor/beneficiary could be eligible for retirement benefits when old age, disability or death occurs. It is advisable to keep a record of the dates and names of the places and countries of employment, as you can coordinate your Jamaican and overseas benefits to maximise the benefits that can be obtained.

When receiving a lump sum pension payment, it is wise to think about purchasing an annuity from a life insurance company to ensure a guaranteed lifetime indexed income. The distinct types of annuities are straight life, guaranteed period, joint life and survivor, instalment refund and US dollar-indexed, which all come with their own risks and conditions, so it is best to discuss your options with a life insurance representative.

As an employee, whether full-time or part time, always keep abreast of any changes to the benefits payments or rules of your ASF or ARS plans, so that you are not surprised when terminating employment.