Jamaica’s tourism industry made history on Wednesday with the launch of the long-awaited Tourism Workers Pension Scheme (TWPS).
The scheme is expected to, directly and indirectly, benefit hundreds of thousands of people employed in the industry.
A defined contributory plan supported by legislation, the pension scheme will require mandatory contributions by workers and employers.
For 2022, contributions will be 3% of gross salary to be matched by the employers’ 3%. Thereafter, the contribution rate will be 5% for both employers and employees.
Speaking at Wednesday’s official launch at the Montego Bay Convention Centre, Minister of Tourism Edmund Bartlett said it was a first for Jamaica as “there is no other country in the world that has a comprehensive tourism workers pension plan.”
While most other pension plans relate to different companies or entities, the TWPS embraces all workers, entrepreneurs and stakeholders ages 18-59 years, whether permanent, contract or self-employed and benefits are payable at age 65 or older.
The scheme, which had been in the making for 14 years, was rolled out with Guardian Life as fund administrators and Sagicor Group Jamaica as fund managers. More than half of the $1-billion seed money provided by the Government of Jamaica has already been disbursed to the scheme.
While recounting the genesis of the pension scheme, Minister Bartlett recalled that nearly 15 years ago at an annual breakfast with workers at the Norman Manley International Airport, at the start of a winter tourist season, “we saw a Red Cap porter who was 78 years old, still pushing the trolley with loads on it. I said, 'How long have you been doing this?' He said 45 years. So I said, 'Why are you still doing this after 45 years?' And he said, 'If I don’t do this at this age, I will not be able to buy my medication; worse, I might not be able to buy my food.'”
Minister Bartlett said he felt that “something is wrong with this picture, as nobody is supposed to be working in any industry, albeit the industry that I am leading, and is compelled at 78 to continue to push heavy loads because there is no recourse.”
Supported by the Tourism Ministry’s Permanent Secretary Jennifer Griffith, a resolution was made then that “we have to do something about it; we have to create a pension plan”.
Participants in the plan are protected by state legislation, with the Financial Services Commission managing the surveillance and regulatory framework to safeguard against breaches and unscrupulous behaviour.
Also, a tourism worker is to be included on the TWPS board of trustees.
Minister Bartlett said the pension fund could become $1 trillion in 10 years.
He noted that “this is not just a game-changer but a huge bit of economic initiative.”
He further explained that “a pension fund the size of what this is likely to be will create a body of capital that is going to change the ability of more people, more institutions to be able to create wealth.”