THE EDITOR, Madam:
I REFER to a report in The Gleaner of June 22 where the Minister of State in the Ministry of Labour and Social Security told the House of Representa-tives that monies from the NIS Fund are to be invested in buying a hotel, specifically the Grand Lido Braco.
My limited knowledge of pension schemes tells me, that, among other things, actuarial reviews are conducted periodically to determine and ensure that:
(a) Funds are available in years to come to pay a pension of a certain value to the youngest active participant in the scheme;
(b) To determine/recommend the type of investment instrument(s) in which the funds are to be placed and for what period(s);
(c) To recommend increases in pension benefits from time to time based on the fund's performance and viability, that is, the amount of money coming into the Fund over a period of years based on either increased number of contributors and/or increased level of contributions and interest accrued on investments, etc.
These recommendations are usually based on sound studies of the portfolio and sound investment strategies with minimal risks.
I say all this to suggest that any form of pension or social security scheme must seek to ensure that beneficiaries' payouts 100 years from now are guaranteed.
To buy into a hotel and to hope for gain, to my mind, is risky and there is no guarantee of a set rate of return on the investment.
I do not know if there is a Board of Trustees or what structure is set up to manage this very large and important portfolio. I would hope that any structure in place did not recommend this as an investment project for the NIS Funds.
Is there an actuarial report? If there is one, could it be published so that we the contributors, especially the 'small people' that pay or have deducted from their wages the contributions that make up this fund, see and satisfy themselves of the soundness of these decisions.
Will someone who has more intimate knowledge of this matter inform the contributors of all the facts so that the country as a whole can be properly advised? This should include the legal provisions on fund investment.
Many workers in Jamaica will have only one source of receiving a pension upon retirement and that will be from the NIS Scheme. We should all ensure that the structures are in place to guarantee each citizen such a right.
I am, etc.,
BASIL DOWNER
72 Stockholm Park
Highgate
St. Mary
