Today’s Editorial February 02: Pension mess unfair

Honest business owners who read the
headline story in Friday’s Caymanian
Compass
were probably seething afterwards.

The article was about the Office of
the Complaints Commissioner looking into the continuing malfunction of the
National Pensions Office.

The story didn’t actually use the
word malfunction, but we have no qualms about using it here. When you have 670
registered companies in a country as small as the Cayman Islands
either making pension payments late or not making them at all, that’s a pretty
serious malfunction.

It’s no wonder the government is
considering doing away with the National Pensions Office.  Why should the government have to pay
salaries to a department that clearly is having little effect on the compliance
with or enforcement of the National Pensions Law.

In many cases, where pension
payments are being deducted from paycheques and then not being paid over to
approved pension providers, non-compliance with the law means that employers
are exploiting their employees at best and stealing from them at worst.

But beyond the moral implications
of such a practice, it also puts law-abiding, responsible employers at a
competitive disadvantage.  Employers who
pay pensions have higher overheads than those that do not. As a result, the
pricing of their goods or services must reflect their higher overheads.  This allows those breaking the law to undercut
the ethical business owners and win contracts they might not have won if they
had to compete on a level playing field.

The National Pensions Office knows
full well what is happening, but has been rendered almost impotent by understaffing
and a National Pensions Law that is nothing but a paper lion. 

This cannot be left to continue.

The government must decide to
either take a hard-nosed approach by strengthening and enforcing the National
Pensions Law, or it should abandon it. To allow the un-level playing field to
continue could do more harm to the economy than any good the Pensions Law could
ever provide to the seemingly select few people with law-abiding employers.

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