The Pension Industry Association of Jamaica, PIAJ, says the COVID-19 economic task force’s recommendations about disaggregating the limits placed on debt and equity investments, as well as an increase in the limit for private equity investments for pension funds, are encouraging.

“All our lobby efforts in relation to the liberalisation of investment limits were premised on private equity having its own limit and not aggregated with private debt, as is currently the case,” said PIAJ President Sanya Goffe. Those changes, if implemented, will widen the scope for pension funds to diversify their investment portfolio, said Goffe in response to Financial Gleaner queries.

The COVID-19 Economic Recovery Task Force Report, tabled in Parliament earlier this month, recommended a review of pension investment regulations.

The task force was chaired by Minister of Finance and the Public Service Dr Nigel Clarke. Private pension funds under management up to December 2019 totalled $701 billion, which the report noted was equivalent to 30 per cent of Jamaica’s economic output, measured as gross domestic product.

The assets of pension plans were said to be heavily integrated into the Jamaican capital markets, with investments in equities amounting to $286 billion or 17 per cent of total market capitalisation. Investments in Government of Jamaica, GOJ, bonds and repurchase agreements stood at $257 billion, representing 37 per cent of total pension assets.

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