Cayman Islands Governor Duncan Taylor has signed legislation that allows private sector companies to suspend statutorily required pension payments for both Caymanian and non-Caymanian employees.
The measures of the National Pensions (Amendment) Bill, 2010, which are also referred to as “pension holiday”, were passed in the Legislative Assembly in March and will become law on 26 April, 2010.
The purpose of the voluntary suspension of pension contributions is, according to the government, to alleviate some of the cost burden for businesses caused by work permit and other fee increases.
Under the law, any suspension of pension payments would have to be mutually agreed between a company and its employee.
If a suspension period has been agreed, employers will be exempted from paying their matching five per cent pension contribution for the duration of the suspension period.
Employees then still have the option of paying their five per cent salary contribution into their pension plan. They might alternatively choose to receive the five per cent contribution in their paycheques instead.