Becki Patterson, Freelance Writer

Brokerage house, Mayberry Investments, in New Kingston. - File

Investment brokers May-berry Investments has launched a new retirement investment product for individuals, which, it says, is receiving strong take-up since being put on the market in March.

"We have been flooded with enquiries and have opened quite a few accounts since we started marketing the product," said Bob Russell, assistant vice-president at Mayberry for structured finance and mutual funds.

Dubbed the Individual Retire-ment Account (IRA), the scheme is to take advantage of two growing trends: a population that is becoming increasingly grey, and a move by firms to down-size or dismantle pension schemes.

Indeed, at a forum last week at which Mayberry highlighted the account, Dr Roger Gibson, a psychiatrist in the Department of Medicine at the University of the West Indies, highlighted a trend that is common across the Caribbean, including Jamaica: Populations are growing older.

For instance, in 1999, about nine per cent of the Caribbean's population was 60 or older, but a United Nations forecast projects that to grow to 16 per cent by 2025, moving to 24 per cent by 2050.

Market opportunity

So, with populations living longer, more and more people will be concerned about retirement income, which is a market opportunity into which the Mayberry account is attempting to tap.

"The initial focus was on self-employed individuals who did not have a pension plan," said Russell. "However, the product can be used by employed individuals, as well as those who would like to have a supplement to their existing pension plans."

Unlike most other retirement plans, the Mayberry offering allows purchasers to make monthly deposits rather than having to put out a big lump sum.

"We liked the idea of a monthly deposit because it is a concept that most people are familiar with in terms of paying a mortgage or paying a car loan," Russell said. "In this case, however, customers will be paying themselves."

Rate of returns

He offered an earnings projection on a $10,000-per-month deposit.

"At a conservative rate of return of 10 per cent annum over 20 years, that would get you a future nest egg of $7.7 million. Over 25 years, it would be $13.4 million," Russell said. "Obviously, we will be trying to exceed this return. At 12 per cent, it would be $10 million and $18.9 million, respectively."

Subscribers to the IRA product will have their money invested in long-term-savings accounts, US$-denominated bonds (some of which are tax exempt), preference shares (dividends tax free), CI-mutual funds (capital appreciation is tax free) and Jamaican stocks (capital appreciation and dividends are tax free).

Fees associated with the Mayberry IRA are a management fee of 2.2 per cent, an administrative fees of 0.3 per cent, and redemption fees.

bekipatterson@hotmail.com.