Whether you have just entered the workforce, or approaching retirement, it's important to begin planning today so you can be prepared for life.The importance of Retirement PlanningMost expenses continue long after you retire. It is estimated that you will require 85% of your final salary to maintain a similar lifestyle during retirement. The longer you save the more you will accumulate and the larger will be your monthly income during retirement. Now is the time to start so you can have Secure Money at Retirement.When you speak with our NCBIC Insurance Advisor, the information we provide in our retirement planning session will allow you to: Step 1: Determine your retirement objectives Step 2: Consider your financial situation both present and in the future Step 3: Develop a retirement plan based on your retirement objective Step 4: Determine a monitoring mechanism to evaluate your plan His eyes slowly flickered open to welcome the subdued light of dawn creeping almost apologetically through half-opened windows. A whiff of aromatic blue mountain beans assaulted his senses. Just outside of the wooden French windows, a myriad of birds flitted excitedly from limb to limb as if brimming with some long anticipated message. In the distance, the soothing pitter-patter of water on real Jamaica rock echoed hypnotically. The crisp clean smell of morning saturated the hazy dew that hung like a potent promise. Nature was in perfect sync with the moment. Then full realization hit with unexpected intensity. He was 45 years old today and tingling with anticipation. Twas the first day of the rest of his life and he was ready. She abruptly awoke, jarred out of a fitful sleep with both hands cold and clammy. She tried to remember the dream, which she knew instinctively had been most unpleasant, but it eluded her. With heart racing and breathing labored she sluggishly moved to her private domain. Flared nostrils and dilated pupils stared back at her from the exquisitely glazed bathroom mirrors. The still was ominous. A quick glance out revealed heavy smog crisscrossed by thin light rays fighting for life. Unspoken anxiety draped the morning like a hang-over, discouraging the dawn. It could have been her haggard reflection or the color of those eyes so familiar, but in a flash, it was back. She remembered. Her subconscious had presented a helpless, spindly and toothless recluse. Then loneliness, lack, emptiness, lack. The family visited when they could, but like her, lived frugally, one day to the next. Each time she awoke after this vision, it was wishing she had feathered her nest egg over the last 35 years. She had lived each day as if there were no tomorrow. Now at 59, the future extending infinitum loomed large, dominating her waking moments as well as her subconscious. Paul Ferrel, in a recent article appearing on the CBS website MarketWatch captioned New investor psychology is endangering retirement, suggests that investors exist in two parallel universes: addicted to short-term consumption, but paralyzed when it comes to long-term investing. The article describes the paralysis that grips 80% of American investors who are programmed towards consumerism and worse yet, in denial. Statistics for the local market are not much different with consumerism spiraling as we allow ourselves to be influenced by the big apple. Despite the extent of financial advice and financial planning information that bombards us daily, too many ignore the telltale signals which confirm that our short-termitis or need for instant gratification is literally eroding the desired quality of life and independence in what should be the mellow years. The idea is not to scrimp and deny self all the niceties of life. It is to decide what you want and where youre going early. Determine what path will allow you to smell the roses along the way so you dont miss life reaching after life. Saving and spending are not mutually exclusive imperatives. The buzzword is balance, balance, and more balance. When NCB Insurance Company, in its July 2003 communications campaign proposed retirement at 45, the market response was at the very leastskeptical. Antagonists and proponents of the idea, fiercely engaged in their favorite past timeargument and debate. Currently, buy-in to the new paradigm is becoming more evident as an increasing number of financial institutions use the print medium among other communication channels to advise on how to retire at the earlier age now being embraced. It is interesting to note that were a snapshot to be taken several years ago with the Freedom 55 concept proposed by London Life, Canada, the same skepticism would have been encountered in international quarters. Then the major shift was that retirement need not happen at 60 or 65, but 5 to ten years earlier. When the retirement at 45 was born, the context was one which referred primarily to having achieved a level of financial independence to pursue a passion or lifelong interest, with the added bonus of being able to derive earnings from such a pursuit. In other words, this was no propagating of a non-productive and idle existence. Our handsome gentleman had worked his plan on the premise that it would take 75% to 80% of current income to be able to enjoy a pre-retirement standard of living. It had been challenging but he had started to plan early with his grandmothers words of wisdom, a constant reminder that one one coco full basket and that he should pay himself first from every pay-check. He had purposefully stuck to the task for 15 years, diversifying his investments to spread the risk, periodically reviewing his portfolio to achieve optimally by way of a combination of guaranteed fixed income and high growth assets. He would always be grateful to his innovative wife who had led the way in borrowing money, collateralized by her OMNI insurance plan when he was a little reluctant, and using the loan proceeds to eventually make much more money for the family. His long-term insurance plans, one for each member of his family, made it very easy to cultivate the savings habits and were the gems in his portfolio. The flexibility of automatic and regular payments which he could increase whenever he wished was a savers paradise. These investments were designated untouchableto be accessed only for the specified financial objectives. The planning/savings mentality, formed and nurtured by several previous generations had allowed him to achieve non-financial goals as well; quality time spent at specific intervals with his immediate and extended family and peace of mind generated by preparedness. When the retirement milestone had eased into view, he had been pleasantly surprised to see how much the multiplier effect of the compound interest had catapulted the accumulated nest-egg. Like an athlete with his eye on the finishing tape, he had gone into overdrive with reviewing the asset mix on his portfolio, liquidating high-risk instruments and placing them as lump sums on OMNI to access the guarantee on his principal and returns that were more predictable. And now, the well-anticipated day was here. They were now comfortable ensconced in retirement while they could still enjoy lifetogether. The damp blue mountain whiffs tickled the end of his nostrils and he inhaled ecstatically. It had been worth the sacrifice. Their choice had been work to live.The Pensions Legislation

After more than 50 years of Employer-sponsored Superannuation Funds being regulated under The Income Tax Act 1955, Jamaicas Pensions legislation The Pensions Act 2005 and the Regulations 2006, came into effect on September 29, 2006. As a result no Employer can operate a Superannuation Fund that is not registered by the Financial Services Commission (FSC). The following is an example of the Jamaican laws that comprise the Pensions legislation:

The Trustees Act, 1897: provides guidance on the standards of behaviour for TrusteesThe Income Tax Act, 1955: provides information on the 3 types of Retirement Savings that qualify for Approval and the tax-deductible and tax-deferred benefits; the framework for establishing, operating and winding-up a Plan;The Pensions (Superannuation Funds and Retirement Schemes) Act, 2005 and The (Governance) (Investment) (Registration, Licensing and Reporting) Regulations, 2006: Regulations by the FSC (www.fscjamaica.org) focused on monitoring Approved Superannuation Funds and Retirement Schemes, standards of duty and care for Employers, Trustees, Pension Advisors and Professionals (actuary, auditor, administrator, investment manager, etc); The (Governance) Regulations provides information on the documents that must be given to Plan Members and their beneficiaries; The Board of Trustees must include Member-appointed, Deferred Pensioner and Pensioner-appointed Trustees, where applicable.You are encouraged to purchase your own copies of these documents for your home library. Why? The (Governance) Regulations 2006 Section 7 specifies that Trustees have the duty to preserve a terminated Members benefits for a period up to150 years. Section 7 (1) (o) (i) and (ii) states where the monies or benefits remain unclaimed after 5 years, the (i) in respect of an ongoing fund or scheme, after advertising annually in accordance with paragraph (n) for a period of not less than five years, retain the monies or benefits shall not revert to such fund or scheme, except after a period of 150 years; (ii) in respect of a fund or scheme which is being or is to be wound up, after advertising annually in accordance with paragraph (n) for a period of not less than five years, shall pay the monies or benefits payable into the Supreme Court not later than six months thereafter.

When you are making your purchase of the laws, also include a hard cover binder, dividers and request that the documents be punched and bound into the binder. The documents can be purchased from the Jamaica Printing Services and it is located at 77 Duke Street, Kingston or you may contact them via the telephone at 967-2250/3982 or 948-4951.

Effective September 29, 2006 the legislation required all Superannuation Funds to be compliant with The Pensions Act and Regulations. Unless a Superannuation Funds Trust Deed and Rules were compliant in every way, the documents would be amended to comply with the legislation. The Employer and the Trustees are aware that the required amendments should be completed with advice from an Attorney (Pensions) and Plan Administrator. Additionally, there is a requirement for the Fund to be registered and the Trustees licensed. The registration requirements attract fees and this may affect the investment yield or credited interest to be applied to the Fund and each Members contributions.

The following are some key points that should help you to understand the benefits that are being accumulated in an Approved Superannuation Fund:

Know the type of Plan. Is it a Defined Benefit or Defined Contribution?Know the vesting type, period and conditions. Keep your pay slips and Annual Member Statements until your retirement date.Your contributions are tax-deductible benefits for a calendar year January to December. If there is an error in your contributions it must be corrected by December 31 of each year.Know your pensionable salary. This could be different from your gross salary.Ensure that your beneficiary data is up-to-date.Obtain a copy of the Funds constitutive documents (Trust Deed & Rules) and the Member Handbook.The Income Tax Act, The Pensions Act and Regulations have many sections dedicated to the rights and benefits of Plan Members and their beneficiary(ies). Purchase a copy of these documents, read them and ask questions. Your Employer-sponsored Approved Superannuation Fund provides benefits in the event of death, disability and retirement. Its your right to know what is provided under the laws of Jamaica.

Contributed by: Magdalena Cooper-de Neuze, LUTCF, CLU, CH. F. C.New Business Manager - NCBIC

NCB enters IRA market with 'smart' productPublished: Tuesday | March 23, 2010 0 Comments

The supplier market for individual retirement account (IRA) products continues to grow, with NCB Insurance Company Limited (NCBIC) on Tuesday putting out its own 'Smart Retirement' plan.The IRAs are are sold to self-employed and other individuals who are not members of a supperannuation scheme.

NCBIC's product is tailored to self-employed and small business owners.

"It is estimated that Jamaicans spend an average of 20 years in retirement and even longer it therefore puts us at risk of out living our savings if we are not careful and save sufficiently," said Patrick Hylton, group managing director of NCB at the product launch at the LIME Golf Academy in Kingston.

The plan targets savers between ages 18 and 69.

Subscribers are required to make at least one payment per year, but can also add to their plan on a monthly, quarterly or semi-annual basis.

The plan offers tax free benefit such as lump sum payments of up to 25 per cent of the accumulated value paid to members upon retirement, tax free exemption for investment income earned through the years of participation as well as immediate pension benefits in the event of permanent disability before retirement.

Further, in the event of death the plan will refund the total accumulated value to a beneficiary.

Customers will also have a choice of how their contribution is invested - a fixed income fund, or a balanced income fund comprising fixed income securities, equities, real estate and other securities, said Ann-Marie Hamilton, general manager of NCBIC.

"The smart fixed income fund will be invested primarily in Government of Jamaica securities and other fixed income for persons who are more risk averse and want to know that they have their money set aside," said Hamilton.

"The balance fund offers an opportunity to earn a little more ..of course it has a little more risk but as a pension plan we will not ever get too risky because while we want to take a little risk so you can make a little more we still have to be cognisant that this is a pension plan and all the securities invested must be for a long term type saving."

The market for IRAs was opened up by the Financial Services Commission less than two years ago.

Since then, firms such as Scotiabank Jamaica Insurance, Mayberry Investments Limited, Prime Asset Management and Jamaica Money Market Brokers and COK Cooperative Credit Union have brought new IRA or other retirement products to market.

It is estimated that 90 per cent of working Jamaicans in the private sector do not contribute to a company sponsored pension fund, leaving open a wide market for IRAs, which allows for savings of up to 20 per cent of annual income.

At March 2009, the most recent data available, the FSC estimated the private pensions market to be valued at $196.5 billion, including individual retirement plans.NCB says it already has $42 billion in pension funds under managementNCB Newsroom

Wednesday, 17 March 2010

NCBIC SMART, a taste of the good life

NCB Insurance Company (NCBIC) officially launched its new individual retirement product the SMART Retirement Plan at a launch event at the LIME Golf Academy recently. The SMART Retirement Plan is a personalized pension plan that provides contributors with a monthly income on retirement and contributions are accumulated tax-free.

NCB Group Managing Director, Patrick Hylton stated, The NCB Group has a long history of pension fund management through its subsidiary West Indies Trust Company Limited (WITCO) which was transferred to NCB Insurance Company in 2007, making NCBIC the industry leader among Pension Fund Managers in Jamaica with over 40 years of service in the industry. NCBIC is the largest segregated pension funds manager in Jamaica with dedicated client relationship officers who are experts in pension regulations and pension administration.

The SMART (Secure Money At Retirement) Retirement Plan is open to Jamaican residents between the ages 18-69 years who are not contributing to any other approved pension plan. This is ideal for the self employed, employees of small and medium-sized enterprises and individuals who were terminated from an approved plan.

SMART offers tax free benefits such as lump sum payments of up to 25% of the accumulated value paid to members upon retirement. There is also a tax exemption for investment income earned through the years of participation. The Plan provides immediate pension benefits in the event of permanent disability before retirement. Should a member of the plan die before retirement, the plan refunds the total accumulated value to your named beneficiary.

Contributing to the fund is simple, as NCB Insurance Company provides flexible payment options which allow you to pay your contributions monthly, quarterly, semi-annually or annually. Payments can be made by salary deduction, pre-authorised payments, via telephone, at any branch of the National Commercial Bank Jamaica Limited (NCB) or via the internet through NCB eLink.

NCBIC ensured that attendees experienced some of the grandeur that awaits them at retirement if they start SMART planning. Guests were taken to the corners of the world with displays from Africa, Asia, the Middle East and Antarctica. They were treated to relaxation therapy by spa experts from the renowned Adam and Eve Day Spa who were on hand to offer back, neck and shoulder massage therapy. The more adventurous rolled up their shelves and perfected their golf swing at the complimentary driving range while all enjoyed the fine dining from Cuisine Art by Jeanette Hutchinson.

SME Execs in attendance were delighted with the offerings. This evening was a refreshing experience; one that puts into perspective the life we should all aspire to enjoy during retirement, remarked Nordia Murray-Lewars, Financial Controller at Crichton Automotives Limited