THE SHIPPING Association of Jamaica (SAJ) celebrates its 85th anniversary this year. To empower its members, Shipping Industry will publish a retirement planning series focusing on savings, from early career stages to retirement, as an invaluable member benefit.
Maritime employees dedicate their careers to keeping Jamaica’s shipping and logistics sector moving. But planning for a smooth transition into retirement is equally important. This article outlines key retirement options for those working within the shipping industry.
Many Jamaicans know 18 marks adulthood, but did you know it’s also the prime time to start planning for your golden years? There has been a widely held view that retirement financial planning starts when one starts to work. However, this thinking contributes to retirement poverty for many upon a retirement event, whether old age, disability or death, said Magdalena Cooper-de Neuze, a licensed life insurance sales representative and pensions consultant at Solid Life and General Insurance Brokers Limited.
She added that there are two categories of retirement savings plans which are based on legislation: National savings plans – National Insurance Scheme (NIS) and National Housing Trust (NHT). These plans are for all Jamaican residents and provides the mandate to start at age 18 for a retirement, whether one is employed, self-employed or not employed. This retirement savings process of taking personal responsibility starts by completing the relevant application for both plans. For individuals age 18 and not employed, they find out their contribution amount, and where and when each monthly payment should be made.
Employer-employee relationship plans: These are usually based on the type of employment contract – for services or of services. No matter the type of relationship, retirement savings should start at the first month of employment, as this will influence one’s retirement lifestyle. There are many types of employment relationships in Jamaica, and one needs to be aware of them as it influences the type of retirement savings plan contribution rate, in addition to NIS and NHT. The contributions are made via one’s earnings, whether weekly, fortnightly, or monthly. The following shares types of employment relationships and the related pension plan which is available, under Jamaican legislation, for each sector:
a. Public sector: The Pensions (Public Service) Act, 2017 provides information of government employees registered under the plan.
b. Private sector: Current legislation for these plans are stated in the Income Tax Act, 1955, The Pensions (Superannuation Funds and Retirement Schemes) Act, 2004 and its enabling Regulations 2006. These plans have their own Financial Services Commission- and Tax Administration Jamaica-approved plan documents. It is wise for each plan member to obtain a copy of the Plan’s Trust Deed and Rules and the Member’s Handbook, which outline the details of the plan and when benefits are due and payable.
c. The tourism sector: The current legislation is The Tourism Workers Pension Scheme, 2019, which became effective on January 31, 2020.
The important details to monitor in each plan document are contribution rates, vesting schedule, and retirement life event benefits, advised Cooper-de Neuze.
By taking charge of your retirement planning early, SAJ members can secure a comfortable and well-deserved future. Review your current contributions; explore options to increase them, if possible; seek guidance from financial professionals; and actively manage your retirement savings journey.