Gov’t owes $1.1M in pensions

Several Cayman Islands government departments are delinquent to the tune of more than $1 million in pension payments due to civil servants.

A few of the payments have been owed since July.

According to records obtained by the Caymanian Compass under the Freedom of Information Law, monthly payments are still owed by the Planning Department, parliamentary pensions both internal and external, the Portfolio of the Civil Service, the Ministry of Tourism, the Cabinet Office, and Cayman’s UK office.

The total of those delinquent payments, which are supposed to be made either each month or bi-weekly in addition to a civil servant’s salary, is $1.1 million through the end of December, according to records obtained by the Compass.

The largest amount currently owed by any of the government agencies is some $530,000 by the Planning Department on pension payments due since October. The Ministry of Tourism follows with more than $300,000 owed for its employees’ monthly pension payments, also since October.

The Portfolio of the Civil Service owes nearly $100,000 in payments, about $20,000 of which has been due since July. The Cabinet Office is delinquent for more than $130,000, according to government records.

The UK office owes a minimal amount, but has apparently not made a payment since July.

It may seem strange after reading the details, but from the government’s perspective the amount currently owed for employee pensions might be considered good news.

As of 1 November, 2009, according to records obtained by the Compass, nearly $4.2 million was owed on monthly pension payments by roughly 20 departments within government, as well as some statutory authorities and government-owned companies.

For instance, the Ministry of Education had a $344,206.48 pension payment due in September that wasn’t made until 3 November.

The audit office had about $38,000 in payments due in August and September that weren’t made until December.

The Ministry of Health made a bulk payment of $175,000 in 3 November for pension payments owed in August, September and October.

The Boatswain’s Beach/Cayman Turtle Farm facility has been late with every single payment due for its workers’ pensions since the month of July, and only managed to pay the balance of those payments – $204,465.06 – three days before Christmas.

Civil servant pensions, as well as many of those who work for government-owned companies and statutory authorities, are managed by the Public Service Pensions Board in a separate fund.

There are two types of payouts made to retired civil servants under the Public Service Pension plan. Caymanian civil servants who were employed in government prior to 2000 are eligible to participate in a defined benefit plan, which means they receive monthly payments like a salary.

All those who joined civil service pension plans after 2000 are enrolled in a defined contribution plan, which means they receive a lump sum payout following their retirement or departure from the service.

Government’s payments to the defined benefit plan for retirees, made as past service pension liability, have seen a major cut in the current budget year. The Cayman Islands is paying less than $2 million into that past service liability fund this year. Last year, some $14 million was budgeted for those payments.

Those past service payments will have to be made up at some point – since the government cannot legally withhold money owed to current retirees that must be paid each month under the defined benefit plan.