Individual Retirement
Schemes
The new pension regulations have given persons who don’t
have a workplace-sponsored pension plan the ability to receive the same tax
benefits for saving in an approved retirement scheme. There are many financial
institutions that are now offering this type of account in Jamaica.
Institutions include:
v
JMMB
v
Sagicor
v
BNS
v
JNBS
Persons can now receive tax allowances on contributions of
up to 20 per cent of their annual gross income per year into an individual
retirement account (IRA). This means that if you save in an approved scheme,
your contributions can actually help to reduce your income tax payable.
You can only contribute to an IRA if you are self-employed,
working on contract or not currently participating in a superannuation plan;
and you can only save in one IRA at a time.
Rules: These contributions are designed to remain in an
approved scheme until you have reached the retirement age of 60 or 65. Funds
placed in these accounts should be solely for your retirement and cannot be
used for emergency needs and other investment goals.
Other features of IRA
- Contributions
of up to 20% of your gross remuneration or taxable income per annum is
allowed to be saved in an Individual Retirement Scheme
- Investment
Income earned over the period of member participation is tax free
- Members
have the option to receive a lump sum payment at retirement
- Lump
sum payments to Beneficiaries are tax free (within limits.. maximum of 2x
salary)
UHY Dawgen can assist your Organization
in designing Tax efficient Emolument package for your Employees , in addition
to our Payroll outsourcing services. Call us today!!!
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