Confusion evident in pension reports

A series of reports from the
National Pensions Office obtained by a private citizen under Cayman’s Freedom
of Information Law have revealed some surprising difficiencies in how the office
tracked companies that weren’t paying into workers’ retirement funds.  

The records reveal that the
pensions office had no record of the majority of the delinquency reports ever
being made; those reports are required by law to be filed each month by the
private sector pension plan providers if they are aware of companies who have
not made good on pension payments to employees.

Whether those reports were actually
made, or if the office simply had no available records wasn’t clear from the
documentation released under the FOI Law.

For instance, from July through
October of 2008, there were no records available for one plan provider –
British American – from the National Pensions Office.

Later on, between November 2008 and
February 2009, British American noted that more than 700 companies registered
with its retirement savings plan were delinquent on payments, but records
pertaining to whether those companies were newly delinquent or had been in trouble
before were not available. Also, records of enforcement efforts based on those
complaints were spotty or simply non-existent.

Another plan provider, British
Caymanian, only had records on file with the National Pensions Office regarding
delinquent companies for four of the 12 months between July 2008 and June 2009.

Acting Pensions Superintendent Amy
Wolliston stated in her reply to the open records request that some delinquency
reports did not exist because the National Pensions Office had stopped “normal
processing” of delinquency reports in the government’s 2007/08 financial year
following the implementation of a new standardised submission format.

Through May 2009, the pensions
office had received 44 delinquency reports from pension plan providers and had
processed half of them, she said.

“Although some reports were not
formally processed, they were periodically reviewed by staff and contact made
with some employers who were reported delinquent,” Ms Wolliston wrote. “When an
employer appears on a delinquency report, they remain on the report…until the
case is resolved.”

According to Cayman Islands
Complaints Commissioner Nicola Williams, about 670 companies in the Cayman Islands were delinquent with their pension
payments to employees when the commission began a review of the country’s
retirement savings system in January.

Ms Williams said her office became aware during a month of
pre-investigative research last year 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.

Former Pensions Superintendent
Cyril Theriault told the Compass earlier this year that the fault does not all
lie with the National Pensions Office. Mr. Theriault said the organisation was
chronically under-funded and lacked the proper staff to look into complaints
made by workers or delinquency reports filed by plan providers.

“I think even the best of (pension) plans never submitted
12 delinquency reports during a year,” Mr. Theriault said in February.
“Besides, we just didn’t have the staff to do each and every report.”

Mr. Theriault said that during his tenure the Pensions
office enjoyed a total of three inspectors at most and, at one point, had just
one inspector.