The Government is proposing to increase the limit on pension fund investments in private companies, a move expected to unlock more than $21 billion in additional capital for private sector and infrastructure financing.

Finance Minister Fayval Williams announced the measure Tuesday among a series of financial reforms designed to unlock billions in local savings for national reconstruction following the devastating impact of Category 5 Hurricane Melissa last year.

She was opening the 2026–2027 Budget Debate in the House of Representatives.

Williams explained that under the proposal, the current five per cent limit on pension fund investments in private companies would rise to 7.5 per cent in the first phase.

She said that movement could allow an additional $21.2 billion in long-term capital to flow into private companies in its first phase.

“Beginning in the new fiscal year, we will begin a process aimed at increasing the percentage of their assets that they can invest in the equity of private companies,” Williams said. “Subject to supervisory monitoring and in the absence of any unforeseen adverse consequences, we will complete the second phase of this increase to 10 per cent by April 2, 2027.”

The new fiscal year will start on April 1.

Williams said pension funds held approximately $847 billion in invested assets as at the end of September 2025.

Based on the existing five per cent limit, about $42.4 billion is currently available for investment in the equity of private companies, she said.

The minister said that if pension fund assets continue to grow at about eight per cent annually, a further $28.2 billion could become available for investment.

Williams described the reform as “a measured, reversible step” that would allow pension funds to reallocate assets to well-governed private investments aligned with their long-term liabilities.

She said the changes form part of a broader effort to mobilise institutional savings to support infrastructure, housing, energy and productive private sector investment while maintaining financial stability.

The minister noted that the pension industry has been calling for completion of the second phase of the reform. “My commitment is to get Phase 2 done,” Williams said.

Williams indicated that drafting instructions have already been sent to the Chief Parliamentary Counsel, after which the bill will move to the Attorney General’s Chambers, Legal Reform and the Financial Services Commission before being finalised.

The FSC regulates pensions funds.

Further reforms target the insurance and securities industries:

– The government will simplify “Regulation 47” to allow life insurers to invest in corporate debt more easily, provided instruments meet objective collateral or credit-rating criteria.

– Pension funds and insurance companies will see their foreign-asset investment limits increased from 10 percent to 15 percent by June.

– A new Fixed Income Trading Platform will be launched to centralize the “opaque and fragmented” bond market, automating workflows and improving price discovery.

– The Primary Dealers system will be overhauled to improve secondary market liquidity and lower the government’s funding costs. (Primary dealers are authorised financial institutions, typically major banks and broker-dealers, that buy government securities (financial instruments such as bonds) directly from the central bank or treasury to resell them).

“All of these reforms I have outlined in the financial sector have one aim, to make the financial sector work better for the Jamaican people and businesses. Full stop,” the minister said.

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