Growth and jobs | I cans summoned to plan his retirement | New

Receiving a pension can actually mean a person is able to live comfortably, or better than their working years, but the issue of retirement planning needs to be taken seriously for that to happen, says Othneil Blagrove, Director principal – sales, JN Life Insurance Company .

Blagrove said because retirement is mandatory regardless of career, Jamaicans need to view retirement planning as an urgent matter and not an issue for the elderly.

“Making sure you have a pension is something we all need to take seriously. Retirement is one of the things we can almost certainly all hope to achieve, one way or another,” he said. “Therefore, there is always a need to have a conversation on the subject, especially since just under 20% of Jamaicans contribute to a registered pension fund.”

“Today, many Jamaicans associate a pension with the elderly…a person who may not be able to support themselves and who is left to rely on their children or on the nanny will of others. However, it does not have to be so. A pension can actually mean that a person can live comfortably and enjoy the same or even better quality of life than when they were able to work,” he added.

The senior executive explained that a pension plan is an employee benefit derived from sums pooled and/or invested in order to finance retirement payments. He said part of treating the issue of retirement with prominence is for people to educate themselves on different ways to plan for retirement, as well as the two main types of approved retirement plans.

“There are approved pension funds, which are for employer pension plans; and the Approved Pension Plan, which is a pension plan for the self-employed and people who are not part of an employer’s pension plan,” Blagrove said.

He added that it was important for people to understand the difference between the two plans.

“Approved pension funds are the retirement plan that most employers have in place. Under this arrangement, employers who have this type of plan require their full-time employees to make mandatory contributions to the plan as a condition of employment,” he said.

“For this arrangement, an employer can contribute a percentage and the employee contributes a mandatory amount of his salary. By law, the maximum allowable contribution that can be made to a pension plan each year is 20% of a person’s annual compensation/salary,” he noted.

People who are self-employed or who are not part of an approved pension fund can also benefit from a pension plan when they retire, Blagrove pointed out.

“They can join a registered retirement plan, like the JN Individual Retirement Scheme. Unlike Registered Pension Fund, in Registered Pension Plan there is no mandatory contribution rate, but the individual must contribute at least once a year and the contribution can be up to 20% of his income. I will also take this opportunity to encourage the self-employed to start as soon as possible, because the more you are able to invest in your retirement, the greater your retirement capital will be.


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