One local investment firm is calling for across-the-board mandatory pension plans here to help workers supplement their savings upon retirement.
Royal Fidelity, a joint venture between Royal Bank of Canada and Fidelity Bank & Trust International Limited, said individual plans were not enough.
Therefore, Vice President and Country Head Jillian Nunes said, employers should be made to establish pension plans for their employees.
“It is a long term product that you are saving for the future and a lot of things can change in your lifetime. So it is essential to supplement whatever savings you do have. A lot of companies still don’t have pension plans and I think that’s significant. I think it should be a mandatory thing in Barbados that you have a company pension plan,” Nunes told Barbados TODAY on the sidelines of the company’s tenth anniversary customer appreciation day.
“I think that is maybe something that you fall short here, making it mandatory for all companies to offer a pension plan, because you do want to have that three-pronged approach – you do want your NIS, your company and then your own personal savings,” she added.
Over the years Barbadians have been encouraged to contribute to a pension plan, especially amidst concerns that the National Insurance Scheme (NIS) could be depleted in under 50 years if some fundamental changes were made, given the island’s aging population and falling birth rate.
The 15th actuarial review released last September said the NIS’ reserves could be depleted “as early as 2045 under the pessimistic scenario”.
The document, which gave the review based on the period 2012 to 2014, with some considerations between January 2015 and September 2016, added that expenditure would exceed contributions each year starting between 2028 and 2045.
The fund’s reserves grew from a revised $3.9 billion at the end of 2011 to reach $4.7 billion at the end of 2014.
Sticking to a campaign promise leading up to the May 24, 2018 general election, Prime Minister and Minister of Finance Mia Mottley announced in her June 11 mini Budget, that the minimum non-contributory pension would rise from $155 to $225 per week.
This additional payment will come from the Treasury, costing an additional $18 million in a fiscal year.