Securities dealers outperform life insurance sector as pension fund managers

As at June 30, 2024, the total value of assets invested in the Jamaican private pensions industry was J$765.44 billion representing a quarter over quarter increase of 0.98 per cent. 

The number of investment managers remained at 25 as there were no new entrants into the private pensions market during the quarter ended June 2024.

At the end of June 2024, both total and active pension coverage in Jamaica decreased from 11.66 per cent and 11.64 per cent to 11.60 per cent and 11.58 per cent, respectively. This decline was primarily due to a marginal increase in total plan membership.



Securities dealers continued to account for the majority of private pension assets. The funds under management of dealers represented 55.31 per cent or $423.40 billion of pension assets
(from 55.19 per cent or $418.37 billion as at March 2024), which experienced a 1.20 per cent growth.

Life insurance companies’ FUM holdings accounted for 36.63 per cent of pension assets or $280.42 billion) and had experienced a 0.69 per cent increase.

The Financial Services Commission (FSC), sector regulator said that overall, the Jamaican pension industry was fairly resilience despite local and global economic challenges and geopolitical tensions.

“Given the beginning of lowering policy rates, growth potential is expected to increase,” the regulator predicted.

June’s performance, it was noted, represents the second consecutive decline in growth rate since the 3.19 per cent growth in December 2023, following March 2024 quarter’s growth of 1.64 per cent.

Fewer plans reflected asset growth in the quarter. Growth for the period was attributed to the 562 pension plans that reported upward movement in asset value ranging from slightly above 0.00 per cent to 34.47 per cent, reflecting 104 less plans than the previous quarter.

Of 741 pension plans that hold assets, 562 or 75.84 per cent reported a quarterly increase in assets, whereas 179 or 24.16 per cent reported a decline.

The FSC said that the number of solvent active pension plans remained the same during the quarter, however, there were more plans reporting higher solvency positions over the last inter-valuation period.

The regulator said that since March 2015, investment arrangements, Government of Jamaica securities,
and stocks and shares have been the top three investment classes for the pension industry all reported marginal to moderate levels of growth.

The growth of deposits during the June 2024 quarter declined when compared to the last quarter-over- quarter increase of 6.34 per cent as at March 2024. This, the FSC states, was indicative of decreased liquidity but also suggests relatively high potential investment returns.

FSC said that the elevated interest rate environment within the economy during the period continued to hinder asset growth within the pension portfolio. This is evidenced in the continued poor performance of the Jamaica stock market for the review period.


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