Retirement planning is, indeed, a serious issue

Tuesday, August 14, 2012

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THIS week's Sunday Observer published a worrisome story that, we hope, has not been overlooked because of the euphoria sparked by the outstanding achievements of our athletes at the just-concluded London Olympic Games.

The story reported that a whopping 82 per cent of the current private sector workforce will have nothing but the state-run National Insurance Scheme (NIS) pension benefits to live off when they retire.

According to Mr Keith Comrie, head of the public sector committee of the Jamaica Confederation of Trade Unions, only 15 per cent of private sector workers receive pensions.

Mr Comrie's revelation was corroborated by Ms Faith Innerarity, director general in the Ministry of Labour and Social Security, who expressed concern for the welfare of thousands of self-employed persons, among them farmers, barbers and vendors who, she said, will not be able to collect NIS benefits when they retire.

"Part of the difficulty that we have in Jamaica is that such a high proportion of our workforce is in the informal sector, and even for the National Insurance Scheme itself, we estimate it's only 40 per cent of the labour force that is actually contributing to national insurance," Ms Innerarity was reported as saying.

According to data provided by the Statistical Institute of Jamaica, the Government employs just over 140,000 workers, while another 500,000 are employed in the private sector, and close to 400,000 persons are self-employed.

Mr Comrie, we believe, is not being alarmist when he describes this situation as "a crisis of immense proportions", for the NIS payment is a mere $2,400 weekly. What, in today's Jamaica, can that realistically do?

As Mr Comrie correctly pointed out, such a paltry sum will not be enough to cover the living and medical expenses of retirees, many of whom are living much longer these days.

Add to that the fact that many people in the workforce are having fewer children, and you can appreciate the point being made by Mr Comrie that some retirees will be less likely to benefit from care or financial assistance from offspring.

It is against that background that we support the Ministry of Labour and Social Security's initiative to host an islandwide series of planning seminars this month and next, to sensitise pre-retirees and self-employed persons about the retirement process.

As part of our contribution to this important issue, we will, today, begin publishing on Page 3 the schedule of the Labour Ministry's retirement seminars.

We encourage our readers to make use of this opportunity, as you cannot begin to plan for retirement too soon.

We accept the point made by Ms Innerarity that some workers might not have much disposable income and, due to pressing consumption needs, are postponing laying the foundation for their twilight years.

However, the quicker we get individuals to appreciate the value of securing their financial future, the better off they will be.

The idea of increased welfare benefits for retired individuals, as proposed by Mr Comrie and Mr Danny Roberts, the head of the Trade Union Education Institute, is, we believe, worthy of debate.

It is a conversation the country needs to engage in as quickly as possible.




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