Pension suspension plan revealed

The Cayman
Islands government intends to temporarily suspend legal requirements
that pension payments be made on behalf of private sector workers by their
employers.

Currently, Cayman’s National
Pensions Law requires private sector employees to donate five per cent of their
yearly salaries to a pension fund, and also requires their employers to match
those five per cent contributions dollar-for-dollar.

Under a proposal made public Friday
afternoon, those five per cent payments made by private sector companies would
be suspended on a voluntary basis.

For Caymanian employees, the
suspension would last for a 12-month period. For non-Caymanian employees, the
requirement for that five per cent payment would be eliminated entirely under
the current legislation.

However, Employment Minister
Rolston Anglin said Friday that government intended to amend that plan to allow
for a 24-month suspension for non-Caymanian employees.

“This measure is something that
government is doing to try to put people where they have more money in their
pockets…and should result in some general easing in our economy,” Mr. Anglin
said.

According to the amendments to the
National Pensions Law placed before the Legislative Assembly Friday, the
pension suspension – or “holiday” as it is called – will be voluntary.

“In the case of an employer-employee
relationship, both the employer and the employee must agree to the suspension
of the relevant pension contributions,” read the memorandum of objects and reasons
attached to the amendment bill. “They must enter into an agreement that
supersedes any contractual rights in their employment agreement.”

Mr. Anglin introduced the bill but
agreed to suspend further debate on it until Monday, to give assembly members
more time to study the proposal.

It was expected that lawmakers
would pass the amendments to the law on Monday, following the debate. However,
the text of the bill did not specify when the pension suspension would actually
take effect.

Mr. Anglin said he realised there
will be several concerns about proposal, including the possibility that
suspending pensions for non-Caymanian workers for longer periods would make it
more attractive for companies to hire foreigners.

The minister pointed out that
employers currently have to pay work permit fees for foreign workers – fees
which recently saw substantial increases – which they are not required to pay
for Caymanians.

Also, Mr. Anglin said that
permanent resident non-Caymanians and those with key employee status would be
subjected to the longer 24-month pension suspension.

Read more about this story in
Monday’s Caymanian Compass…

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