Pensions Administration

An officer on retirement may elect to receive in lieu of his full pension a reduced pension at the rate of 3/4ths of such full pension plus a gratuity of 12½ times one-fourth of the full pension. He is under no obligation to make such election, but once he does so, the full pension cannot be legally restored at any time afterwards. However, since 1st April 1982, the Government adopted a policy of restoring full pensions to persons who on retirement elected to take a reduced pension and gratuity. Such restoration is made with effect from the completion of 12½ years in retirement.

An officer who retires with less than 10 years service is eligible to receive a gratuity equivalent to 5 times what his annual rate of pension would be if there were no minimum service to qualify for a pension. In other words, calculate what his pension would be in respect of his actual service by using the pension calculation formula and multiply the result by 5.

Where an officer dies while in service, provided he was appointed in his post, there may be paid to his estate either:-

1. one year’s pensionable emoluments; or
2. His commuted pension gratuity, that is, the gratuity which the deceased himself would have received if he had retired at the date of his death and had elected to receive a reduced pension and gratuity, whichever is the greater.

It should be emphasised that such gratuity is paid to the deceased’s estate and not to his spouse as is generally believed. Payment is made on production of a Probate of Will or Letters of Administration granted in the Estate.

Where an officer is retired on the ground of abolition of office or reorganisation of service, that officer is not required to have 10 or more year’s service to qualify for a pension. Once he is confirmed in his appointment, a pension is calculated. What this means is that an officer can be eligible for pension under this heading after 1 year’s service.
Also, an additional pension is payable based on 1/60 of the officer’s pensionable emolument for each completed 3 years of pensionable service up to a maximum of 10/60. Normal pension and additional pension should not exceed the pension which would be payable had the officer continued in the service to age 55 in the same post and had received increments for which he was eligible.

Where an officer retires on the ground of ill-health and his service is 10 or more years but less than 20 years, the officer is credited with additional years to bring his service to 20 years or the difference between the officer’s age and 60 years whichever is less. These additional years are used to give an additional pension based on the normal pension formula.
Example, if the officer had 15 years service and was age 50 years the additional pension would be based on 5 years to bring his service to 20 years. However, if he had 15 years service and his age was 57 years, the additional pension would be calculated on 3 years.

Hitherto, all periods of an officer’s service prior to any break caused by voluntary resignation or dismissal for misconduct were disregarded in the computation of any pension for which the officer subsequently became eligible. However, the Pensions Act was amended to enable breaks in service to be disregarded. Nevertheless certain conditions have been laid down in order for one to enjoy this facility. Chief among these conditions are: –

1. no period in relation to which benefits were paid at the time of leaving the service will be taken into account with any subsequent service for pension purposes;
2. no period prior to dismissal for misconduct will also be taken into account unless the Governor General so directs having regard to all the circumstances of the case;
3. no period during which an officer was serving on a temporary basis will be taken into account unless such temporary employment was followed by a permanent appointment in which the officer was confirmed;
4. no period while an officer was serving on probation will likewise be regarded unless he was confirmed in his appointment; and
5. In order to receive a pension an officer will be required to have total service of 15 years unlike an officer who serves on a continuous basis where the minimum requirement is 10 years.

The Pensions Act also provides for the payment of deferred pensions, i.e. the payment of pensions on attaining normal retiring age to officers who have satisfied certain specified conditions and left the service prior to attaining retiring age. The pension will be paid to officers who have served for not less than 10 continuous years or to officers with breaks in service whose total periods of service reckoned on the basis set out at paragraph 8 amount to not less than 15 years. Such pensions will be paid when the officer attains the age of 60 years. Again this pension will not be paid to officers who have been dismissed from the service for misconduct or to officers who left the service prior to 1st April 1972.
Where an officer with breaks in service whose total periods of service which may be taken into account amount to less than 15 years he may be granted a pension in respect of any period which by itself was not less than 10 years. Thus if an officer had say 11 years’ continuous service followed by a break and then a period for say 3 years he will be granted a pension in respect of the 11 continuous years.

Under instructions from the Ministry of Finance Pensions Branch, All GOJ pensioners are paid by the Pensions Unit of the Accountant General’s Department. There are greater than 33,000 pensioners on roll, and they are generally classified under 12 divisions.  Namely:

• Public Officer
• Police (ISCF) (JCF)
• Parish Council
• Governor General
• Pensioners relief fund
• Compassionate Award
• Widows and Orphans
• Jamaica Railway Corporation
• Agricultural Society

Each pensioner is further assigned to a subdivision in accordance to the Ministry, Department or Agency (MDA) from which he retired, and each pension payment is governed by one of the laws below:

• The Pensions Act
• The Teachers Act
• Pensions (Civil Service family Benefits) Act
• Constabulary Force Act
• The Constables (Special) Act
• Pensions (Prime Minister) Act
• Legislative Service Act
• The Parish Councillors Act
• Jamaica Railway Corporation (Pensions) Regulations 1973

Payments are made on the authority of an Award Letter from the Ministry of Finance and Planning. The Award Letter details exactly what is to be paid and instructs payment of the following:

• Gratuity on pension
• Gratuity on Compassionate (one off payment)
• Advance
• Alimentary Allowance
• Pension and Gratuity
• Monthly Pension
• Temporary Supplement
• Restoration to full pension
• Balance of Pension
• Re-computation of Pension
• Widows and Orphans
• Exgatia Payment
• Estate Payments

On retirement, the officer who is eligible for a pension has the option of applying for a full pension or a reduced pension and gratuity. The full pension is determined by the officer’s last salary at retirement date and years of service. The person who opts for a full pension does not receive a gratuity.

The person who opts for a gratuity will receive the gratuity which is calculated by using a quarter of the person full pension for 12 ½ years. The remaining reduced pension is therefore ¾ of the full pension, and is paid for 12 ½ years. This pensioner is restored to full pension 12 ½ years in retirement.

A gratuity may be granted on one of two bases;  1) a percentage of the salary and years of service for persons not entitled to a pension or 2) as a ¼ of the full pension calculated over 12 ½ years.

In some extenuating circumstances pensioners may request an advance on gratuity to cover emergency expenses within a specific time (usually medical expenses).  This person will be entitled to a reduced pension and gratuity. The advance on gratuity will be deducted from any subsequent amounts awarded by the Ministry of Finance.

A compassionate gratuity may be granted to a person who does not qualify for a pension based on either years of service or on the fact that he was not in a pensionable post.

An alimentary allowance is a provisional pension granted until the reduced pension is finalized.

The alimentary allowance is stated as an annual amount and is paid as a monthly allowance until the actual pension is granted. The alimentary allowance therefore acts as an advance on the pension, and will be recovered when the pension is granted.

The payments of alimentary allowance and advance on gratuity do not require audit verification for indebtedness. As a result, once full documentation is received from the pensioner, the alimentary allowance and advance on gratuity payments may be completed within two to three weeks.

When the pension is finalized, the Ministry of Finance forwards another letter to the Accountant General’s Department for payment, a copy of which is sent to the pensioner.

This letter will state that the pensioner has elected to receive a reduced pension in lieu of the full pension. The reduced pension will be payable along with the gratuity.

The pension which was due to be paid at the date of retirement and the alimentary allowance are netted off. The advance on gratuity and actual gratuity are also netted off and the difference paid to the pensioner.

Applicable deductions such as statutory, Widows and Orphans, Government indebtedness and so on are made from this payment. This payment will be subject to audit checks and will be fully processed within eight weeks.

For certain ranks of the JDF, no option is given for a reduced pension, and full pension is paid on retirement. This is called “Retired Pay” or “Terminal Grant”

Pensioners are placed on the monthly payroll after the initial gratuity has been paid. The payroll is populated with the pensioner’s particulars from the Award Letter and monthly pension will commence on the next pay day.

The Minister of Finance on the approval of the Cabinet of Jamaica may grant yearly increases to pensioners. These increases are supplementary to the basic pension and are graduated to ensure that no pensioner is paid below a certain minimum. The increases are gazetted and forwarded to the Accountant General’s Department for payment.

Pensioners who are 55 years old or older and who have completed 2 ½ years from date of retirement are eligible for the Temporary Supplement increase.

As a general rule, pensioners over the age of 55 years and who have completed between 10 and 19 years of service are guaranteed a total pension (basic and temporary supplement) of not less than $15,000.00 per month. Where that pensioner has completed 20years of service or more, he will receive a total pension of not less than $19,000.00 per month.

These conditions are subject to periodic reviews.

A pensioner who opts for the gratuity and thereby electing to receive a reduced pension at the initial stage of retirement, will have his full pension restored after 12 ½ years.

In the event that the pensioner dies, the following documents must be presented before any balance of pension due to a beneficiary can be processed:  original probated will or Letters of Administration from the Administrator General’s Department.

If the pensioner dies intestate, the person who bears the cost of funeral and burial may be entitled to a refund of the costs so borne. Payment is made on the provision of following: declaration form stamped by a Justice of the Peace which states that the pensioner died intestate, death certificate, burial order and receipts showing payment for burial. Any balance remaining after deducting the burial expenses will fall to the Estate and Letters of Administration will have to be taken out by the next of kin to recover this balance.

Where the Ministry of Finance has received additional service record information, it may become necessary to recalculate the pension which may result in an increase in the pension due, and the gratuity which was paid at the time of retirement. Where this becomes necessary a third letter is forwarded to the Accountant General’s Department and the pensioner by the Ministry of Finance. This third letter will make reference to the second letter which outlined the reduced pension payable and gratuity.

Widows, Widower and dependents including the mother of public officers and police are eligible for this type of pension.  An Award Letter is sent form the Ministry of Finance stating the amount to be paid and to whom payment is to be made.

Widows and Widowers pension of police and the military will cease upon re- marriage. Pension ceases for children upon attaining the age of 19 years. However, if the dependent child is still in school, an application must be made through the Ministry of Finance, seeking approval for a continuation of the pension.  On approval, the pension may continue until age 23 years or at the end of the course of studies, whichever happens earlier.

For police orphans, when the pension of a child ceases by virtue of his age, and where there are other siblings who are under the age of 19 years, the pension of the aged out child is redistributed equally amongst the other siblings.

On approval from the Ministry of Finance an Exgratia Payment may be made to persons who do not qualify for a pension. In some special cases the Exgratia Payment becomes a monthly pension.

Where a civil servant dies whilst in the service or whilst in the process of retirement, the Ministry of Finance will issue an Award Letter for payment of gratuity or pension at the date of death. Where a Probated Will is in place, the Executor will be paid accordingly. Where no Will exists, the next of kin may apply through the Administrator General’s Department for Letters of Administration to claim the gratuity or pension.  This gratuity is based on years of service and the salary at time of death. The next of kin may include parents who were deemed to be dependent on the deceased, spouses and children.

Before payment of the gratuity can be made, an original Probated Will or Letters of Administration from the Administrator General’s Department must be submitted to the AGD, and this will be used as the authority to pay the gratuity.

A pension is also payable on the basis of the officer’s salary at the time of death. This pension is paid to the wife, children under the age of 19 years and parents who were deemed to be dependent of the deceased for the following categories of Public Servants;  Police, JDF and Public Officers who contributed to the Family Benefit Fund.

This is a life status document sent to each pensioner on a quarterly basis and is the primary document used to make monthly pension payments. It contains all the particulars of the pensioner for example: his name; address; his account number and the particulars of the ministry or department from which he retired. He is required to fill in this form, affix his signature and have it signed by a Justice of the Peace or other designated persons and return it to the Pensions Unit of the AGD.

Three types of life certificates are issued; namely; a) the original life certificate which is printed by the payroll system; b) a duplicate life certificate where the original is lost or damaged and c) the overseas life certificate for pensioners who reside overseas and are paid locally.

Where the pensioner fails to submit a life certificate or the life certificate is late or invalid the monthly pension will be held until a valid life certificate is returned to the department. Any arrears due will be paid on reinstatement.

Pensioners may be also be suspended if they fail to collect two consecutive cheques from the post office. The post office has been instructed by the Accountant General to return cheques which have not been collected after two weeks.

• Justice of the Peace with stamp and seal
• Police Inspector with stamp and seal
• Minister of Religion with stamp and seal
• Bank Manager with stamp and seal
• Post Office Manager or Clerk with stamp and seal
• Principal with School stamp and seal
• Notary Public with stamp and seal for persons residing overseas
• Civil Servant of the equivalent rank of GMG/SEG1 stating their rank and stamped with the stamp of the Ministry or Department to which they belong.

Where the pensioner is unable to collect a life certificate, at their request, a duplicate life certificate will be emailed for completion. The completed original duplicate must be mailed in or taken back to the Pensions Unit for processing. Where the pensioner is unable to access a form through the internet, a letter in lieu of life certificate will be accepted.

All pensioners are liable to pay income taxes. The applicable income tax threshold for pensioners under age 55 is $507,312.00 per year. For pensioners 55 to 64 years of age, the applicable income tax threshold is $587,312.00 per year. For pensions 65 years and older, the applicable tax threshold is $667,312.00 per year.

Pensioners also have the option of applying to the Tax Administration Department for a determined income tax rate.

A pensioner may receive an exemption of income tax through the Ministry of Finance. This exemption is usually in accordance with section 12(y) of the Income Tax Act,

The Government of Jamaica in partnership with Sagicor Life, has developed a health coverage plan for pensioners 55 years and older. The plan is called Government Pensioners Administrative Services Only or (GPASO). The government covers 90% of the actual cost of the plan while the pensions bear the remaining 10%.

Qualifying pensioners may apply directly to Sagicor Life for membership.  Officers proceeding on retirement and who have elected to receive the Alimentary and Advance on gratuity may apply to the GPASO through their Personnel Unit.

Pensioners are given two options for the health coverage. They may elect for an individual coverage plan or the family coverage. Pensioners also have an option to enrol in a supplemental plan (Medigap) which covers in hospitalization cost, on the individual or family plan.

Pensioners may at any time give instructions to change their personal information such as mailing address, appointing an agent, or changing the mode of payment. These changes must be signed by the pensioner and witnessed by a Justice of the Peace.  In the case of a minor, any change in the appointment of an agent must be done through the Ministry of Finance.

Accommodations are made to pay pensioners who have migrated. However, before any payments are made to a pensioner overseas, it must be established that the pensioner is a permanent resident of that country.

The pensioner must therefore submit a notarized letter to the Pensions Unit requesting that the payment be sent overseas. This letter should by accompanied by proof of permanent legal residence overseas. In this regard, the pension is paid through the established authority of each country.

The Jamaica Government Pensioners’ Association was founded in 1966 and currently has a membership of just over 3000 individuals. The Association functions with a Managing Committee which strives to carry-out its mandate of improving the general welfare of pensioners. Its registered office is Block A, Ministry of Finance  and Planning, Heroes Circle, Kingston 4.

So far the Association has the following Chapters:

• Kingston and St. Andrew
• Manchester
• Clarendon
• St. Catherine
• St. James

• Promoting the general welfare and well-being of Government Pensioners
• Promoting humanitarian assistance within its capacity to members incapable of managing their own affairs by reason of age or infirmity
• Encouraging and facilitating the establishment of Chapters Island-wide.