FOLLOWING the launch of the long-awaited pension plan that will ensure tourism workers who sign up will not be left scrambling to survive after they retire, LetsTravelCaribbean.com spoke with Chairman of the Board of Trustees for the scheme, Ryan Parkes, about what comes next. His advice for the sector’s workers: If you’re on the verge of 60, the cut-off age to sign up, “run and register” before you lose out on the minimum $200,000 a year now guaranteed.

The Tourism Workers’ Pension Scheme (TWPS) will be the first time the majority of roughly 350,000 employees will be signing up for a pension. Read on as Parkes explains how it will change their lives, what they need to do now, and what questions they should be asking.

TO-DO LIST

LetsTravelCaribbean.com (LTC): If I’m a tourism work, and I’ve never participated in a pension scheme before, what do I need to do now?

Ryan Parkes (RP): The plan has always been for Guardian Life, the fund administrator, to go out to a lot of these workplaces to speak to people about the scheme itself, because there is a lot of information that the workers need to have before they decide.

Once the information is disseminated… and we determine that the employee is eligible — meaning that they are [older than] 18 and below 60; they are not part of another scheme; and they are resident in Jamaica for at least six months — then they can sign up for this scheme.

HOW TO SIGN UP; CASUAL VS FULL-TIME STAFF

LTC: How do they sign up, and is there a difference if they are not full-time staff?

RP: Guardian would facilitate the enrolment process, which can also be done online. The worker would work in tandem with the employer through the HR [human resource] unit to complete the required form, and enrolment begins.

For self-employed, contractual, casual and seasonal tourism workers who have not yet been contacted, they may enrol via the Tourism Workers’ Pension Scheme website. The administrator is going after the employed workers first because there’s a formal structure — meaning there would be a physical office they could go to, and a lot of these would be in the hotels.

For the other categories of workers, because we are leaving no one behind, we try and encourage them to enrol via the website twps.myguardiangroup.com. Or they may contact the nearest Guardian Life office to enrol by calling (876) 927-4105, or emailing twps.@myguardiangroup.com.

Because we’re talking about close to 350,000 workers, we have to run on parallel tracks so that we cover as many people as possible, so we will be going to a lot of people. But we also want a lot of them to also come to us via those channels.

ASK ABOUT

LTC: Once the TWPS is up and running for a few years, what are some of the questions I should be asking if I want to retire soon?

RP: These would include:

1. What am I entitled to?

2. When will [pay out] commence?

3. What do I need to do? Should I just write a letter or would HR be writing on my behalf? You have to trigger knowledge to the fund manager [Sagicor] that this person is going on retirement.

So, those are things that the employee ought to question and would want to know.

Now if I may attempt to answer them.

1. Guardian Life sets up an individual savings account for each contributor and, with the particular formula, they would be able to compute an estimated figure that you would be entitled to. So even before you formally retire, it is something you can ask through your HR department, to determine what your expected retirement benefit is per month.

2. Payments usually commence on the first of the next month, following retirement. Normal retirement age is 65 years. However, they have the option to retire early at 55 years, or late retirement at age 70.

WHO BENEFITS?

LTC: What are the payout options available when a participant in the TWPS retires?

RP: At the point when the worker is signing up the form for enrolment to be a part of the scheme, that worker is going to be given some options. On attainment of the retirement age, depending on the years of contribution, the age and gender — among other factors — the amount in the savings will be used to compute benefit options, which include a lump sum payment plus a monthly pension.

The beneficiary benefits

The worker can choose a guaranteed pension for five years or 10 years where beneficiaries will be paid the pension if the pensioner dies before the guarantee period ends. With this option, if, for example, the pensioner dies during that five-year or 10-year period — and they have the option to choose [the time frame stipulated] — the named beneficiary can benefit from the payment before the guarantee period ends.

Lifetime pension

Now, there’s another option which is the lifetime pension payment. [This is] where the pension is paid for the life of the pensioner, and it ends when the pensioner dies. So no beneficiary will get any benefit here. The pension is paid up until the [tourism worker] dies, at which point the pension ceases.

Dual approach

The third option is the joint life and survivor option where the pension payment is made to the pensioner, and in the case of his or her death is paid to the named spouse [legally married] for that spouse’s lifetime. So the payment moves upon the death of the pensioner to the spouse and it continues until the spouse dies, then the pension goes away.

Read more in Part 2