👵 More financial freedom for private pensioners

The Department of Labour, in consultation with the National Pensions Board, has approved an increase in the annual disbursement limit for private sector pensions. The 2024 Retirement Savings Arrangements (RSA) disbursement figure has been raised from CI$14,125 to CI$15,000, effective from 1 June 2024. This 6.2% increase over the 2023 limit is based on the 2023 inflation rate. The law currently restricts the amount of money pensioners can withdraw annually, irrespective of their total pension fund accumulated through mandatory contributions from themselves and their employers. 💼

According to Bennard Ebanks, Director of the Department of Labour and Pensions, this increase in private pensions will create more equity between retired public and private sector workers. All applications received from 1 June 2024 and all approved RSAs are entitled to the new maximum figure of CI$15,000 at their next disbursement, which amounts to $1,250 per month. However, many retirees have to use a significant portion of this amount to cover high health insurance or medical bills. 🏥

During the COVID-19 pandemic, private sector workers were allowed to withdraw funds from their pensions and mandatory contributions into the schemes were frozen for over two years, further reducing the amount in their funds. The government amended the law in 2020 to allow people to withdraw a lump sum of up to CI$10,000 plus 25% of the remaining balance of their pensions. Despite the increase in the annual disbursement limit, living on CI$1,250 per month can still prove a significant struggle for many if it is their only income. 💰