Jacqueline Sharp, general manager, Scotia Jamaica Life Insurances, speaks to members of the media at Scotia Centre. - Rudolph Brown/Chief Photographer

Scotia Jamaica Life Insurance Company (SJLIC) is now moving ahead with the launch of a retirement scheme in early March, having got the green light from the Financial Services Commission (FSC).

"We are in the process of training staff and fine-tuning the system," said SJLIC head, Jacqueline Sharp.

Approval received

SJLIC received approval for its retirement scheme from the FSC last October and says it plans to target both self-employed and employed persons between ages 18 and 65 who are not already participating in a formal superannuation scheme.

"Of the working population, only about 10 per cent are in a formal pension/retirement savings plan," said Sharp.

With a potential of about 800,000-900,000 persons available to participate in the scheme, it will offer substantial volumes over time, said Sharp.

Persons who take up the offer will be able to save up to 20 per cent of their salary with a choice as to when to make payment, whether monthly or ad hoc contributions throughout the year, depending on their cash flow.

While it was difficult to put a number on the potential revenue that could be generated, she said that they would be targeting as many persons as possible.

The pensions industry, consisting of both superannuation funds and retirement schemes, is currently valued at $206.6 billion - spread across a total of 809 plans - with retirement schemes accounting for 20 per cent, new FSC data published January 30 show.

A combined 170 pension plans valued at $12 billion are being wound up, but those schemes represent only 5.9 per cent of the private pension-funds industry.

Another $2.5 billion is held in 128 inactive schemes.

Worth of active plans

Active plans command just under $192 billion in assets, spread across 511 schemes.

Of the 170 plans being terminated, 37 are under the defined benefit scheme of arrangement while 101 are defined contribution schemes.

So far, the FSC said that it had approved five retirement schemes, two since January and three in 2008.

"With the passing of the Pensions Act and the amendment in income tax now allowing persons to contribute 20 per cent of their salary to the schemes, it has now become an attractive and meaningful product for investment managers and institutions," said Nicole Jenez, senior director for pensions at the FSC.

Prior to the amendment of the act, persons were allowed to save only $6,000 in a retirement scheme, a sum which institutions say was too small to make proper provision for retirement.

Sagicor Life Jamaica was one of the first to offer a retirement savings plan on the market in 2007. But the plan was not entirely new, having been initially registered to Island Life, remaining dormant since Island Life's merger with Sagicor in 2003.

Mayberry followed in August last year, launching an individual retirement account, a move, it said, was to take advantage of a population that was becoming increasingly grey, and firms downsizing or dismantling pension schemes.

2,872 applications received

According to the FSC, up to January 15, a total of 2,872 applications were received for registration and licensing of pension plans and related activities.

Sharp said SJLIC's product would be marketed as a vehicle for accumulated savings.

"It will be enhanced as we go along," she said, adding that as they enter the payout phase, the insu-rance company will be developing payout annuity products, along with other enhancements.

sabrina.gordon@gleanerjm.com