Sagicor Pooled Investment Funds Limited (Sagicor PIF) has launched a 'Lifestyle' scheme permitting Jamaicans to save up to 20 per cent of their annual income in a tax-free individual retirement account (IRA).

The product adds to a growing pool already launched by Prime Asset Management, Capital and Credit, Scotia Insurance, and others.

In two weeks, Jamaica Money Market Brokers will also join the throng.

Richard Byles, president and CEO of Sagicor Life Jamaica, parent of Sagicor PIF, says the new offering has been facilitated by changes in the law which previously limited tax-free pension savings to $6,000 monthly, but now allows up to 20 per cent of income to be saved tax free.

Self-employed, contract workers

The Sagicor plan is on offer to self-employed and contract workers and others not already contributing to a pension plan - all of whom must be Jamaican residents age 18 to 60.

Those who are already in a group pension plan will not be able to participate unless they opt to change management.

The Sagicor PIF, which manages some $39 billion, will pay out 25 per cent of money accrued in cash on retirement and then use the balance to purchase an annuity from which the pensioner will receive a monthly sum, as long as he or she is alive.

Prime IRA, launched in June, is targeted at small- and medium-size companies, as well as at self-employed persons, according to Prime Asset's managing director Rezworth Burchenson.

It allows portability from one IRA to another IRA, or to and from a pension fund.

The product was to be sold to the self-employed through associated company Victoria Mutual Building Society (VMBS).

Prime Asset has more than $15 billion in funds under management for approximately 4,700 members.

As incentive to potential clients, buyers of Prime IRA are offered preferential rates on BCIC motor-insurance products, as well as on mortgages and savings products through VMBS.

Both Prime Asset and British Caribbean Insurance Company are owned by the Matalons.

Prime Asset has eliminated all management and investment fees for clients who buy into the Prime IRA scheme by this month.

Sagicor's Lifestyle product includes both disability and death benefits.

It has two differing risk profiles: one, a unitised pooled fund (UPF) offering the possibility of 18.6 per cent in annual returns, and a deposit administration fund (DAF), with a guaranteed return of 11.5 per cent annually.

Greater return

Unitised pooled funds, which offer the greater return, include equity, mortgage and real estate, fixed income, foreign currency (no more than 20 per cent of portfolio), money-market funds, a diversified fund including stocks, fixed-income securities and real estate, and venture funds and international equity funds.

PIF investment manager, Brendalee Martin, says subscribers to the UPF, could accumulate $26.3 million in 25 years by saving $4,000 monthly.

However, those who choose the guaranteed returns under the DAF will earn $6.9 million from 11.5 per cent return on their $4,000 saved monthly

avia.collinder@gleanerjm.com