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The reform of the Pensions System is aimed at ensuring that proper arrangements are made by and for Jamaicans during their working lives, so as to enable them to receive an adequate pension at retirement. It has been designed to improve the current system without defaulting on existing rights, to encourage the extension of adequate pension facilities to self-employed persons, as well as to introduce arrangements to facilitate the provision of pensions by children for their aged parents. The need for a comprehensive reform of the pensions system in Jamaica has emerged because of the deficiencies of the current arrangement. Presently, there are approximately 1,500 registered pension schemes, which are either self-administered or managed/invested by Pension Fund Administrators. However, no legislation exists to effectively provide for their regulation. The minimal provisions in the Income Tax Act are primarily concerned with the tax exempt status of pension schemes, and impose few requirements on the operations of the schemes. Proposals for the reform of the pensions system have been forthcoming from the early 1970s, however, these recommendations were not, or only partially implemented. In response to serious concerns raised about the situation, in 1994 the Ministry of Finance and Planning established a Pensions Reform Committee (PRC). 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 formed the broad basis and outline of the reforms proposed in the Green Paper entitled, "Reform of the Pensions System in Jamaica". This Paper was tabled in Parliament on January 12, 1999, and was subsequently circulated to the public. Since its circulation to the public, the Green Paper on Pensions Reform has stimulated much discussion. The Ministry of Finance and Planning has received numerous written comments from individuals/companies, and the Honourable Donald Buchanan, then Minister of State in the Ministry of Finance and Planning, and his technical team have attended several seminars to discuss the proposals outlined in the Paper. Both the written and oral comments have been diverse, and numerous suggestions for improving the proposals in the Green Paper have been received and analyzed. While the basic principles used to guide the proposed reforms have not been altered, a number of major proposals were modified to reflect the recommendations of the public. A revised outline of the proposals, highlighting these modifications, were submitted to Cabinet by the Honourable Minister of Finance and Planning in June 2000. After consideration, Cabinet gave approval for using the enhanced proposals as the basis on which the National Pensions Act would be developed, and instructed that a White Paper be issued to the public outlining the modified proposals.
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May 2001
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