National Provident Fund for Dominica
Government plans to introduce a National Provident Fund for Dominica in the New Year.
This Policy Paper gives an outline of the main aspects of the scheme and is submitted for information
and comments from the general public. A careful study of this matter has been undertaken and the
Government feels that the time is now ripe for such a scheme.
Sope and Objectives of the Fund
The Fund will be a contributory scheme which would enable employees, with the help of
employers, to make provision during their working life for an income after they retire from work or
Mode of Operation of the Fund
Under this scheme a special fund is set up with an individual account for each employee covered.
Employees and employers are required to pay regular contributions which are credited to the account
of the employee. The money in the Fund is invested and the interest income is available to meet the
administrative expenses of the scheme and to credit interest in the members' accounts. In this way
substantial sums accumulate over the years which are paid out as pensions or lump sum when a member
has retired from work or- is incapacitated.
Contributions to the Fund
Contributions to the Fund will be on a wage-related basis, i.e. according to the ability of the
employee to contribute. The rate proposed is five cents (.05c.) on every dollar earned to be contributed
by the employee and matched by another five cents (.05c.) by the employer totalling 10c. on every
dollar earned to be credited to the employee's account. It is intended that such contributions will be
exempt from taxation.
Benefits from the Fund
The benefits under the scheme shall provide for financial support in the form of a pension
during retirement. The age of retirement shall be 60 years. In order to cater for those approaching
retirement age when the scheme commences, provision may be made for the benefit to be payable at
some time before minimum retirement age. On death before retirement the amount standing to a
member's credit will be paid out in the form of benefits to his dependents. The Ordinance shall lay
down who the beneficiary shall be in various circumstances. A member's entitlement shall be his
total contributions plus interest.
It is expected that the capital in the Fund will be invested in accordance with sound commercial
principles. The whole question of investment of the Fund, however, will be expertly considered in due
course. Suffice it to state that the aim is to obtain the maximum return for the benefit of the contribu-
tors consistent with the security of the capital. It is felt that Government securities would offer a
relatively advantageous avenue for investment.
Membership of the Fund
Membership of the Fund will include all economic groups with the possible exception of small
farm helpers. Persons earning more than $3,600.00 p.a. shall not normally be included in the scheme,
though voluntary memberhsip would be considered. Non-established Government employees will
be included in the scheme, though pensionable public employees would be excluded. Persons who
are self-employed and wish to participate may be permitted to do so on condition that their annual
income does not exceed $3,600.00 and that their contribution will be doubled. It will also be necessary
to fix an upper age limit for participation in the scheme and it is thought that 50 should be the maximum
age for starting membership. Existing pension schemes may be exempted by the Board appointed
to administer the Fund provided that benefits under those schemes are at least as good or better than
that provided under the Government Scheme.
Administration and Financing of the Fund
The Fund will be established by Ordinance and will be set up to operate outside of the financial
machinery of Government. It is proposed that a special Board will be responsible for the administra-
tion and management of the Fund and the Board shall include representatives of employers, employees,
Government and some independent members.
The Services of an expert have been requested to assist with and advise on the implementation
of the scheme, the training and recruitment of staff, and other matters essential to the successful
operation of a Provident Fund.
Government considers this measure necessary as a first step in the direction of a social security
system, the essential purpose of which is "freedom from want", one of the four freedoms enshrined in
the Atlantic Charter.
It must be emphasized once more that this policy paper sets out some of the objectives of a
Government planned Provident Fund. There will be many details to be settled and many points to be
resolved before the scheme is finally established. It is essential therefore that there should be full
public discussion on a matter of such import. Hence the invitation to the public for views and com-
ments on the proposal. Copies of this Paper are also being despatched to interested groups such as
Trade Unions and Employers.
Ministry of Home Affairs.
30th September, 1969.