Fortress promotes pension plan

WHILE some medium and large companies in Barbados do offer pension plans, there is still the case where about 70 per cent of the country’s working population are not part of a pension plan.

As such if this situation is not addressed, it could have negative consequences for those people in the future.

This warning has been sounded by Rene Delmas, Pension Director, Fortress Fund Managers, while offering up a Multi-Employer Pension Plan (MEP) option for companies.

“As Barbados continues to experience challenging economic circumstances, the Fortress MEP is a possible solution for small companies that have no standalone pension, because it is a low-cost option,” said Mr. Delmas.

He pointed out that Fortress recently launched the MEP and like a standalone pension plan, “it is a defined contribution plan where fixed amounts or rates decided by each employer are used to fund retirement.

“It allows employees of two or more different employers to contribute to a pension fund,” Mr. Delmas said, while noting that employers participating in the fund do not have to be affiliated companies.

Stating that this is what makes it multi-employer, the Fortress official said that this fund is a somewhat new proposition for Barbados “where we are more familiar with the standalone pension plan in which the company appoints a board of trustees to be responsible for the plan”.

In other words, he went on, each company is the sponsor of the plan for their employees and only their employees can join the plan.

According to Mr. Delmas, “A Multi-Employer Pension Plan is different. There is only one pension plan, but companies are allowed to join that plan even if there’s no relationship between them. The result is a coming together under the umbrella of a single pension plan, with each company having its own separate account.”

He said that furthermore, administration of the MEP does not rest with the company or employer but with a board of trustees, resulting in the alleviation of the burden of managing the plan.

“The Fortress MEP would also be attractive to smaller companies that may have an existing plan, but want a reduction in the unit costs of operating that plan,” Mr. Delmas added.