Jamaica News: Debate on the Tourism Workers Pension Bill, which seeks to establish a defined contribution pension scheme for tourism workers, began in the House of Representatives on May 22.
The legislation was piloted by Minister of Tourism, Hon. Edmund Bartlett.
In his address, Mr. Bartlett said the pension scheme will require mandatory contributions by workers and employers.
“The plan will cover all workers 18 to 59 years of age in the tourism sector, whether permanent, contract or self-employed.
Benefits will be payable at age 65 years or older,” he said.
He noted that initially, for the first two years, the contribution will be three per cent of gross salary to be matched by the employer, and five per cent thereafter.
Mr. Bartlett informed that the Ministry is providing $1 billion to seed the Fund, so that immediate benefit can accrue to qualified pensioners who have met the vested period of five years.
“These pensioners will receive a minimum pension of $200,000 per year. This Pension Plan embraces everyone in the sector, whether he or she be red cap, front desk manager, craft trader, housekeeper, raftsmen or any other category of worker in the industry, including those who are self-employed,” he said.
Mr. Bartlett noted that this represents the biggest human capital development-related game changer in the tourism sector in Jamaica’s history.
The legislation will come into effect by an appointed day notice made by the Minister and published in the Gazette.
The Financial Services Commission will be responsible for regulatory oversight of the Scheme, in accordance with the provisions of the Tourism Workers Pension Act, the Pensions (Superannuation Funds and Retirement Schemes) Act and the Financial Services Commission Act.
Meanwhile, Clause 10 establishes the resources of the Scheme, which include the one-billion-dollar endowment as well as all contributions of the members of the Scheme and their employers and the investment returns.
“For the Tourism Workers Pension Scheme to be successful, it must have the same income tax privileges as is now given to retirement schemes and superannuation funds,” Mr. Bartlett said.
“As the Tourism Workers Pension Scheme is neither a superannuation fund nor a retirement scheme, the Ministry of Finance has requested that the Ministry of Tourism specifically state that the investment income accruing to the Fund is exempt, as well as the contributions to the Fund by the employer, and the members are tax exempt within the allowable limit of the Income Tax Act,” he added.
Mr. Bartlett said that at the appropriate time, he intends to make an amendment to the Bill for such income tax exemptions to be specifically stated.
Debate on the Bill is to be continued in the Lower House.
Source: JIS News