Under the Tourism Workers Pension Scheme (TWPS) launched on January 12, tourism sector workers now 59 and over will get the full $200,000 a year pension pay-out when they retire at age 65. The shortfall in their contributions, created as the fund is newly launched, will be filled by a $1-billion injection from the Government.
All this was welcome news for sector workers who witnessed the historic launch at the Montego Bay Convention Centre. An estimated 350,000 individuals are expected to benefit from the TWPS, which has been 14 years in the making.
“We all feel good. On behalf of all tourism workers we want to thank the tourism minister [Edmund Bartlett] and the Government. When people look out for small people you have to be grateful for it. It’s a bold step,” President of the Montego Bay Red Cap Porters Association Hopeton Burnett said at the launch.
His colleague, Phillip Leach, was equally exuberant.
“We really, really appreciate it because we now will have something to look forward to when we get older and unable to work,” he said.
Under the plan, tourism sector workers aged 18 to 59 will contribute three per cent of their salary, to be matched by their employers.
Minister Bartlett said the Government has already provided more than half of the $1 billion it has committed to jump-starting the scheme over a five-year period.
“I wanted to emphasise this in order to [point out] another unique feature of this pension scheme, that of creating an augmented group of people who would have been 59 years old and would only have a maximum of five years’ contribution to their 65th birthday, when the pension eligibility would kick in,” he noted. “Because of this fund by your Government, those persons — even though they have only been contributing for five years — will be able to get $200,000 per year as though they were contributing for 20 or more years.”
This feature, he said, was unique to the TWPS.
“There’s no other pension fund or pension scheme in the world that I know of which has this feature. And this is one of the reasons I made the point of the game-changer that the scheme is,” Bartlett said. “We have a commitment to the workers of the tourism industry which goes far beyond the traditional thoughts that have pervaded an industry that [has] sprung up without structure and without a formation based on strategic planning.”
He recounted that the idea of the pension scheme was hatched during his initial stewardship as tourism minister when he had seen a 78-year-old red cap porter at the Norman Manley International Airport, who told him that he had no option but to continue working in his twilight years in order to be able to purchase medication and food.
“I immediately sensed something is wrong with this picture,” Bartlett recounted. “And so at that point… I said we have to do something about it. We have to create a pension plan for the workers of the tourism industry.”
President of the Jamaica Hotel and Tourist Association (JHTA) Clifton Reader wants to take it a step further, making participation in the scheme automatic for all sector employees.
“I believe that we should put in a system where it’s written, as an employment policy, that once you’re joining a company as a new employee you should be registered on the pension plan. I’m urging all tourism workers, whether you’re directly or indirectly employed to the industry, to sign up,” he said.
The JHTA head pointed out that, unlike in years gone by, there is no guarantee that children will provide for their elderly parents.
“Investment in children is no longer a retirement plan. So I don’t think we should try that one going forward. And so today, I urge the young [and] the old to take advantage of this plan,” Reader said, stressing that the pension funds accumulated travel from job to job with the employee.
Sagicor is the manager of the TWPS fund and Guardian Life is the administrator.