Assistant Manager for Pension Administration at JN Fund Managers Limited, Roxanne Wizzart, says that there are many benefits from contributing to a pension plan including providing the contributor with a regular income upon retirement.
She noted that there are many senior citizens, who are working longer because they do not have a pension plan.
“The pension plan allows you to save so that when you get older you have the opportunity to choose to stop working if you want to,” she pointed out.
Miss Wizzart was addressing the Jamaica Business Development Corporation’s (JBDC) recent virtual BizZone session under the theme: ‘The Importance and Benefits of Pensions for MSMEs.’
Highlighting other benefits, she noted that pension contributions in Jamaica are tax-deferred, and so persons have the opportunity to contribute up to 20 per cent of their income before any tax or statutory deductions are taken.
“This is a great benefit. You have the opportunity to have those contributions go towards the pension plan prior to any of those deductions,” she pointed out.
Miss Wizzart said that being part of a pension plan provides opportunity for the contributors to benefit from an investment income.
“Money that you contribute to the pension arrangement is now being invested so that you can continue earning. The fact that this is a larger pool of funds means it opens up greater opportunities for how the monies can be invested.
“The law of the land states that the income earned from those investments are not taxed so there is even greater potential for you to earn on the monies that are contributed in the pension arrangement,” she pointed out.
Miss Wizzart noted that persons in a pension plan are also able to access early, late and ill-health retirement benefits.
“Depending on the plan that you are a part of, it will determine your retirement age; it is specified in the trust deed and rules”, she pointed out.
She noted that early retirement is usually 10 years before the required age, late retirement is typically five years after the required age, while for ill-health retirement, the pension plan is able to provide a benefit if the contributor becomes incapacitated, whether physically or mentally, and is unable to work.
She said that the payment that persons will receive if they access these benefits will be the same as if they took normal retirement.
Miss Wizzart noted that termination and death benefits are also included in pension plans.
The JBDC is the Government’s business development agency that assists in the sustainable creation and development of micro, small and medium-sized enterprises (MSME) in Jamaica.