Barbados: One in Four Pension Plans Underfunded

• The Barbados pension system is facing a growing crisis, Central Bank Governor Dr Kevin Greenidge warned, with more than 28% of defined benefit plans underfunded and an average funding rate of just 84.1%. Addressing the Eckler Annual Pension Investment Conference, Greenidge pressed for urgent reform and innovation to ensure the system’s sustainability as Barbadians are living longer. According to the Pan American Health Authority, the life expectancy at birth in Barbados in 2024 is projected to be 76.3 years, 1.7 years higher than the 2000 life expectancy of 74.6 years.
• Greenidge emphasised the challenges facing the pension industry, particularly the impact of an ageing population and declining birth rates. “If our pension system is to remain a reliable source of financial security for retirees, it must adapt to changing demographics and economic conditions,” he said.
• The governor highlighted opportunities for pension funds to play a transformative role in national development. He encouraged stakeholders to consider strategic investments in key areas such as climate resilience, affordable housing, and green technology, which align with national priorities and promise stable long-term returns.
• He also pointed to government-led initiatives such as the Barbados Optional Savings Scheme Plus (BOSS Plus) as secure options for pension funds to grow assets, while bolstering economic growth. BOSS Plus offers a 4.5% return, presenting an opportunity for pension plans to strengthen their portfolios while contributing to economic growth.
• “Pensions are far more than financial instruments. They are a promise of security and dignity for all retirees. To fulfil that promise, we must strengthen governance, improve financial literacy, and embrace innovation. This is a shared responsibility, one that demands resilience, collaboration, and forward-thinking”, the governor added.

(Source: Barbados Today; PAHO)