Sunday, October 04, 2015

(From left) Rezworth Burchenson, managing director of Prime Asset Management; Kelly Peters, CEO and managing partner of BEWorks Inc; and Denis Chung, CEO of the Private Sector Organisation of Jamaica, at the head table during the Prime Asset Management’s 8th annual pensions seminar at the Jamaica Pegasus hotel in New Kingston last Tuesday. (PHOTO: GARFIELD ROBINSON)

While being careful not to classify Jamaica’s pension system as one in crisis, Dennis Chung says that it definitely has its challenges, which, if not addressed properly by the Government, could have a devastating impact on the country in the future.

In an interview with the Jamaica Observer, Chung, CEO of the Private Sector Organisation of Jamaica (PSOJ), said that there are two challenges which now face the Government in its efforts to reform pension arrangements.

He identifies public sector pension reform as the first challenge. “Pension liabilities

[are] not accrued from being set aside, [but are] paid from the Consolidated Fund,” Chung said. Instead he said that Government’s treatment of public sector pension should be similar to that of private where it is “must be put aside — allocated as a recurring expenditure separate from the Consolidated Fund”.

Secondly, he noted that the current pension model, which is mainly managed by the National Insurance Scheme (NIS), is unsustainable. In his presentation Tuesday at the 8th Prime Asset Management/PSOJ Pension Forum, Chung described the NIS as “woefully inadequate”, and said that it “means private pension (company-sponsored and personal pension schemes) and savings/investments will have to fill the gap” in post-retirement life. “The government pension fund must ensure that it continues proper governance practice and ensure maximum return to taxpayers who have no choice but to contribute,” he said.

http://www.jamaicaobserver.com/business/Pension-crisis-looming—Chung-_19231856