Pension suspension dead

The Cayman Islands government has nixed plans to implement a temporary pension suspension, or ‘holiday’ as officials have called it, for civil servants that was aimed at saving more than CI $40 million in the country’s upcoming budget.

Education Minister Rolston Anglin confirmed Friday afternoon that the proposal was dead.

‘The government has looked carefully at the public service non-payment of pensions and had a dialogue with the (Civil Service) Association and the (Public Service Pensions) Board,’ Mr. Anglin said. ‘We have seen that’s a proposal we’re not going to follow through with.’

However, Mr. Anglin said government was still discussing plans to delay past pension service liability payments for the current budget year as a way of alleviating costs. That money would eventually have to be repaid in full to help support retired civil servants on the government’s defined benefit plan.

In the last budget year, government spent some CI $14 million on past pension liability costs

Other measures to reduce government costs were being discussed, including a modest reduction in civil servant paycheques through the end of the current budget year, which is 30 June 2010. But Mr. Anglin cautioned that nothing had been finalised.

Meanwhile, Leader of Government Business McKeeva Bush was expected to head off to the United Kingdom for face-to-face negotiations next week regarding the UK’s recent decision not to allow Cayman’s government to borrow any further cash without a sustainable long-term revenue generating plan.

Mr. Bush has said that local banks have agreed to let Cayman borrow some $372 million, pending approval from the UK, to help the country get through this fiscal year.

Check out Monday’s Caymanian Compass for much more on this story….