Pensions - Supervisory Framework

In Barbados, retirement income is received primarily from three sources:

• a Government sponsored social security scheme, formally called the National Insurance Scheme;
• Personal savings in the form of retirement schemes and personal annuity plans;
• Occupational Pension Plans or Employer Sponsored Pension Plans are pension plans established by an employer to benefit some or all of its employees. They may also be referred to as private pension plans.

The legislation governing occupational pension plans is the Occupational Pension Benefits Act Cap 350B (the the Act). Before the enactment of this legislation, the Inland Revenue Department had full responsibility for the approval of new occupational pension schemes and amendments, by virtue of the Income Tax Act – Cap. 73. However the Income Tax Act in its present format was never intended or equipped to address recurring issues such as non-payment of employees’ contributions by employers, delays in terms of payments of benefits, and conflicts of interest between sponsors and trustees.

The Financial Services Commission (FSC) is the body responsible for the supervision and regulation of private pension plans which come under the Act. The Pension Division of the FSC is directly responsible for this supervision.
The FSC is authorized under the Act to:

approve and register employer sponsored pension plans and employer sponsored group registered retirement savings plan

• regulate and supervise Occupational Pension Plans
• examine the records of Occupational Pension Plan providers in such a manner as the FSC sees fit
• grant approval for the winding up and surplus distribution of Occupational Pension Plans funds
• apply penalties for breaches of the Act.