OCC probes pension system

670 companies delinquent on payments

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Cayman’s new complaints
commissioner is investigating how the country’s regulatory body for private sector
pensions is policing companies that don’t pay what they owe their workers.

“Currently (the National Pensions
Office) is not functioning properly,” Complaints Commissioner Nicola Williams
said during an interview with the Caymanian Compass, noting that 670 registered
companies in the Cayman Islands were either late on pension payments or are
simply not making those at all.

Ms Williams said her office became
aware during a month of pre-investigative research that some local businesses
were taking pension contributions from employees and spending them on other
things, including day-to-day operations. She said others were clearly “waiting
until the 11th hour” – essentially withholding payment until someone
forced them to cough up the money.

The full amount of pension payments
owed by those 670 companies is hard to glean simply because the pensions office
depends on the companies themselves to report how much they owe.

The complaints commissioner
questioned how businesses that are already not following the law could be
trusted to report the amount of their delinquent contributions accurately.

“(Pension non-payment) seems to cut
across all socio-economic barriers, but it particularly affects the poorer
sections of our society and people nearing the end of their working life,” Ms
Williams said.  

The commissioner said her office’s
review would hopefully be completed in May, and that it would only consider
pension non-compliance in the private sector.

The Caymanian Compass recently
reported that more than $1 million in delinquent pension payments was owed by
government entities, but the commissioner noted that was likely a small amount
compared to what private companies currently owe.

The OCC intends to release the full
amount of delinquent pensions owed in its final report, if that amount can ever
be determined. The commissioner said she would also consider making public the
names of the worst pension law violators.

Ms Williams said the investigation
would focus mainly on the ability of the National Pensions Office to
effectively investigate, charge, and convict companies that are non-compliant
in making pension contributions required under the law. She said the OCC would
further review the role the solicitor general’s office plays in the prosecution
of alleged offenders.

“Some people might say ‘well, the
complaints commissioner’s office only deals with government maladministration,
what are they doing looking into private companies?’ What we’re looking into is
the pensions office and the board that goes with that,” Ms Williams said.

In fairness to the pensions office,
the commissioner noted it has been chronically understaffed and may not have
received appropriate support from the government in that regard. She said her
office’s review would look into that aspect as well

Also, she said the OCC would look
at the current National Pensions Law, which provides a mechanism for fining
delinquent companies following appropriate court proceedings – but in many
cases, Ms Williams said that fine amounts to a slap on the wrist.

“Often it’s cheaper for companies
to go to court and pay a fine than it is for them to pay the full amount of the
pension,” she said. “In any case, the (National Pensions) Law hasn’t been
updated since 2000.”

Ms Williams said she was concerned
that the pensions office did not have the power to police non-compliance, thereby
allowing companies continue to ignore Cayman’s pension laws and get away with
it.  

NPO changes

Whether the National Pensions
Office would survive until the end of the complaints commissioner’s review was
thrown into question this week.

Education Minister Rolston Anglin,
who has responsibility for national pensions, told the Compass Wednesday that
government was reviewing a potential shift to Cayman’s strategy in regulating
and enforcing the pensions law.

One option being considered was
moving the regulatory responsibilities now handled by the pensions office and
shifting those to the Cayman Islands Monetary Authority. The monetary authority
already regulates the Islands’ banks and insurance
firms.

The enforcement of non-compliance with
pension payments could then be shifted to another government agency in attempts
to set up a “clearing house” for all employment related matters in one agency.

“I can’t prejudge the investigation,
but if it goes the way I’m envisioning you would not have an NPO, you would not
have (an NPO) board,” Mr. Anglin said. “CIMA’s the board…you just have another
area of CIMA.”

“My vision is that (complaints and
enforcement) will be handled within the department of labour, so you have a
one-stop shop.”

However, the minister noted that
discussions are at a preliminary stage and no final decisions on the matter
have been taken. A meeting to discuss the issue had been was set with the
National Pensions Office for next week.

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Mr. Anglin
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