The Bank of Jamaica (“BOJ”) on October 30, 2020 issued directions on the limits in respect of foreign assets held by approved superannuation funds and approved retirement schemes. Prior to these directions the total foreign assets held could not exceed 5% of the total assets of the fund or scheme.

The Bank of Jamaica (Dealings in Foreign Currency) (Foreign Assets limit) (Pension Funds) Directions, 2020 provides essentially that:

1. With effect from November 1, 2020 the foreign assets held by a fund or scheme may not exceed 7.5% of total assets;
2. With effect from April 1, 2021 the foreign assets held by a fund or scheme may not exceed 10% of total assets;
3. Fair value and exchange rate changes with regard to the foreign assets will not be taken into account when assessing compliance with the limit;
4. Allowable Foreign Assets are foreign currency instruments issued by the Government of Jamaica, or issued or expressly guaranteed by the governments of the USA, Canada and the UK.

Notwithstanding the directions issued, the BOJ has separately acknowledged that there are funds or schemes holding foreign assets outside the stated requirements and has advised that:

1. Having regard to the fact that “disposing of these instruments under current market conditions could concretise losses”, the BOJ is “prepared to exercise forbearance” once funds or schemes do not acquire additional foreign assets beyond the level held at August 31, 2020;
2. Steps should be taken to regularise the foreign asset holdings over time “through continued growth in local (and total) assets” and the Investment Managers of such funds or schemes are required to submit a plan of action for reducing any level of non-compliance to the Financial Services Commission (“FSC”) by November 30, 2020.

Additional measures are also being taken to ensure compliance, in that, Investment Managers of funds and schemes have been required to submit monthly reports to the Financial Services Commission setting out the foreign asset holdings of respective funds or schemes. These reports are to be submitted within 30 days after the end of each month and a template for these reports can be obtained from the FSC.

Please do not hesitate to reach out to any one of our Pension Attorneys with any questions.