Ashford W. Meikle, Business Reporter

Some 3,500 retired Jamaicans who get pensions through the U.K. Pension Services office will no longer have the option of receiving their payments in hard currency, following a policy review in Britain.

In a letter dated September 9, the office advised retired nationals living in Jamaica that it would no longer pay their pensions in pound sterling.

"... If your U.K. state pension is being paid into a sterling or non-Jamaican dollar bank account in Jamaica, we cannot continue with these arrangements and ask you to take action to regularise the position," wrote Pension Centre manager Geoff Ogle.

The office - which is overseen by the Department of Work and Pensions (DWP) - defended its decision to change the payment benefits in its letter to the pensioners, saying: "When your payment arrangements were initially set up, we advised you that our policy is to pay benefits in local currency to customers living abroad," the letter read.

UK account needed

To continue receiving their pension in sterling, the office advised, pensioners would have to open a bank account in the U.K.

Yesterday, the press and political affairs officer at the British High Commission, Mark Waller, confirmed the decision.

"It is actually contrary to the Department of Works and Pension policy which is to pay customers living overseas into local bank accounts into local currencies. They have just become aware of that anomaly," he told Wednesday Business.

"The DWP is obliged to bring these payments into line with its worldwide policy of paying customers with local bank accounts in local currency [such as] Jamaican dollars," read a press release from the High Commission forwarded by Waller.

But, the president of the Jamaica Association of Returning Resi-dents, Percival LaTouche, has blasted the decision by the Pensions Service.

"The way it was done by the Department of Work and Pensions is totally wrong," he commented to Wednesday Business.

LaTouche said the office should have been more frank and open with the Pensions Office at the British High Commission.

"They have put out a lot of releases which have not been properly aired or carried in the press so that the public can understand it clearly - they have an office at the British High Commission here where things should be handled and which they should have notified before."

LaTouche said he would be meeting with the British authorities Friday for further discussions.

Still, Waller insisted that the decision by The Pension Service would not affect the remaining 11,500 persons in Jamaica who receive pensions from the U.K. through other arrangements.

No conversion loss

He also noted that pensioners are unlikely to lose because of the currency conversion.

"That rate will be set in the U.K. so any funds transferred to their accounts here will be at the rate of exchange set in the U.K., which probably will be higher than any rate they will be able to get from any commercial entity here," he said.

The High Commission pointed out that, arising out of discussions, the DWP had agreed to postpone the implementation of its new policy to January next year.

"This is to allow customers time to let the Pension Service know their new bank account details," the release said.

The decision by The Pension Service follows the recent tendering process in which the Bank of Scotland - the former distributor of pensions - lost the bid to Citibank, banking sources say.

However, Waller declined to confirm if in fact Citibank was the new distributor.

"We have recently undergone a tendering exercise and the new bank will provide an improved service including faster payment times and improved foreign exchange rates," said the High Commission spokes-man.

Last Friday, Bank of Nova Scotia Jamaica announced that it would end distribution of UK pensions in Jamaica on October 1, explaining that it's affiliate in the United Kingdom, the Bank of Scotland, had lost the recent bid to continue distributing U.K. pensions overseas.

Locally, BNS provides the service to some 4,500 persons weekly.

It is understood that the new contract with Citibank stipulates that only the American bank can distribute pensions locally - a worry for some given that the local Citibank, headed by Peter Moses, sold out its retail banking business to GraceKennedy's FirstGlobal Bank three years ago.

ashford.meikle@gleanerjm.com