Your editorial, ‘Pension Violators Look Out’, like CIMA Chairman Tim Ridley’s recent comments on non-payment of pension contributions and medical insurance premiums, is spot on.
Employers who take money from employees under false pretences are committing fraud and must be dealt with accordingly.
However, based on my recent experience, it will take a major change in government policy to change a public attitude, which regards this practice as a game without penalties.
The National Pensions Office was notified by my pension scheme provider at the beginning of 2008 that my employer was delinquent with payments. This information was not conveyed to the victims of the fraud but was kept within the NPO, which proceeded to negotiate a payment plan, allowing the employer to avoid court action in return for a promise the arrears would be made good.
This despite the fact that, in my case, no payments had been made during the previous eight months and the company owed an estimated CI$30,000 in respect of all employees. The decision also seems to have failed to reflect the fact that the company had done exactly the same thing just three years earlier but failed to properly clear the arrears and had been trading for at least 12 months while technically insolvent.
Two months into the payment plan, just CI$520 had been handed over at a time when the balance of my pension fund should have been in excess of CI$3,000. At that rate the arrears will not be cleared until September 2008 at the earliest despite the fact the money has been taken from my wages since 23 March, 2007.
A soft response like this might pay dividends with a first-offender but, in this case, it benefits no one.
It allows the delinquent employer to continue in business at a time when other arrangements, such as a managed liquidation, might have been more appropriate and more importantly it does nothing to protect funds belonging to current and former employees.
At the end of the day the message given by this half-hearted approach to law enforcement seems to be that, if you have the right contacts, you can break the law with impunity.
I contrast this to policies back home, where similar problems are dealt with robustly and employers who fail to pay mandatory contributions face losing the freedom and their businesses.
Cayman has such measures available, including the removal of trade and business licenses and restrictions on work permits, so why is the law not being properly enforced?