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Many pension plans existed prior to the National Insurance Scheme (NIS) which was introduced in 1966 as a compulsory social security system covering the entire work force in Jamaica. The changes in Jamaica's demographic and economic conditions have precipitated an increasing awareness, both by employers and workers, of the importance of providing for income security at the end of their working life. A large number of employers have sought to supplement the benefits payable to their employees under the compulsory NIS through the creation of pension and superannuation schemes, which exist in both the private and public sectors. However, there have been several undesirable elements in the operation and functioning of a number of these schemes, and it has long been recognized that no suitable legislation exists to provide for their regulation. During the early 1970's a working party headed by Mr. W.G. Woodham, former Permanent Secretary in the Ministry of Pensions and Social Security, made proposals for the control of private pension and superannuation schemes, and in 1980 there was a comprehensive Inquiry Report by Mrs. Daisy M. Coke, Consulting Actuary, on the Solvency and Financial Viability of Superannuation Schemes. Recommendations for reforms to the system were also made in the report of the Pension's Committee of the Jamaica Employers' Federation in 1987. These recommendations for reforms were not, or only partially implemented, and in response to serious concerns raised about the situation, in 1994 the Ministry of Finance and Planning established a Pensions Reform Committee (PRC) under the chairmanship of Mr. Patrick L. Taylor, former Superintendent of Insurance. The PRC was constituted with representation from a broad cross-section of persons involved in and concerned with pensions operations and administration in Jamaica. The recommendations of the PRC have been endorsed, in principle, by the Cabinet and they form the broad basis and outline of the reforms now being proposed. To this end, the reforms contained herein have sought to create the framework within which the pension schemes in Jamaica can be effectively regulated and organized so as to provide the maximum individual and national benefit, while at the same time ensuring that existing rights are preserved. The proposed reforms cover almost all areas of pensions regulation from occupational pensions to changes in public-sector and personal pensions. This paper essentially sets out the broad principles that should govern the regulation of the pensions system. In essence, the proposals call for the retention of an enhanced NIS as the compulsory basic pension scheme for all workers and, additionally, the enactment of legislation for the governance of pension and superannuation schemes. There are also proposals for conversion over time of unfunded arrangements for Public Servants to funded schemes.
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