An investment in your longevity
Tourism workers talk retirement
She is not yet 30 years-old, however, Shakera Hunter is already focused on her retirement. Actually, she has joined a growing cohort of aware workers in the tourism industry, who, whether they are full-time or seasonal workers, are now investing to support their longevity.
The hotel worker from Browns Town, St Ann, who is in her late 20s, has always saved and budgeted religiously, at times forgoing the urge to splurge, to ensure that she has some funds in place for that proverbial 'rainy day'.
"I never thought seriously about my pension until I was talking with my employer's brother about a year ago. He worked in the civil service and was made redundant; and he explained to me that if he had resigned he would not have anything to get; and that made me think, because I was not contributing to a pension plan," she recounted.
Hunter subsequently went to the Browns Town branch of Jamaica National Building Society (JNBS), where she saves, and asked about their retirement plan. "They told me what I needed, and I went home and collected the necessary documents; and returned the same day to sign up for the JN Individual Retirement Scheme (JNIRS)," she related.
But, she was driven by a lot more than the story from her employer's brother. Unlike her industry counterparts working for larger hotels, Hunter works for a small hotel on the Runaway Bay corridor in St Ann. She does not receive gratuities, therefore, her take-home pay is smaller in comparison to other hotel workers, despite the fact that she is employed throughout the year, and not seasonally.
"When I considered that, I think to myself that, if I am going to have things to my comfort, I am going to have to make some sacrifices and live within my means," she said, noting that although challenging, the minimum five per cent she invests each month in the JN Individual Retirement Scheme is manageable.
"I do it, and it's not a bother to me," added Desmond Robinson, a 45 year-old store porter at a popular restaurant and bar along the 'Hip Strip' in Montego Bay, who also invests five per cent of his monthly income with the JNIRS through a salary deduction.
"It feels good knowing someone is taking care of your wealth, so that when I retire I am comfortable. It feels good in my spirit," the professed Green Heights Assembly Church of God Christian man added.
In a retirement scheme, persons may contribute a base five per cent to a maximum of 20 per cent of their income at least once per year, explains Sharon Smith, a licensed pension advisor and JNBS consultant with responsibility for the JNIRS. This, she notes, makes an individual retirement scheme a very suitable facility for workers who may not have a retirement plan or who may not be earning a monthly income.
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"Many tourism workers earn their income this way," she says, "as they are often employed seasonally, especially during the winter season; and, therefore, they do not necessarily earn a monthly salary. In addition, many of their employers do not have a pension plan in place as part of their employment arrangement; and, as a result, workers need to ensure that they plan for their retirement on their own."
Industry data reveals that there are very few tourism workers who are entitled to pension benefits beyond their contributions to the National Insurance Scheme. And, recent data from the tourism ministry shows that only some 6,084 employees in the industry contribute to pension schemes registered and monitored by the Financial Services Commission (FSC). This is a small number when viewed within the context of the approximately 80,000 persons who are directly employed to the sector; and, the even wider number of workers, such as craft vendors and agro-suppliers among others, who indirectly work in the tourism industry.
"Through investment in a licensed retirement scheme, such as the JNIRS, tourism workers such as Hunter and Robinson, do not only have a facility to take care of their pension, but they can also earn more on their savings than they would have done in a regular savings account, or other instruments," Smith said, "as their contributions are tax deferred."
She further explained that, individual retirement schemes offer members the flexibility to mix their investment options, so that they can protect their savings from the devaluation of the Jamaican currency and inflation.
"You understand how the payment in the tourism industry works. For most people it isn't much and that is a cause for concern," said JNIRS contributor, Elieene Braham, who has been working in the tourism industry for 15 years. In spite of that situation and the state of the economy, the Montego Bay-based accounting clerk believes it is important for tourism workers to make at least the minimum five percent contribution towards a pension for their retirement.
"When you consider how rapidly the dollar has been sliding and the rate of inflation, it may seem difficult to save, but saving now will help to secure that benefit for when you retire. You can't always depend on your children to provide for you in your old age," she advised.
"In life, anything can happen," conceded Robinson, who pointed out that his decision to save for retirement was triggered by a popular television commercial sponsored by the Financial Services Commission. The ad portrays a former businessman living on the streets, looking back at his life with regret because he failed to plan for his retirement years. "I never wanted to have to look back with regret like the man in that 0ad and realise that I have nothing to fall back on. And, you don't want to have to be working all your life," he concluded.