government watchdog has called the regulation of the country’s private sector
pension system “one of the most pressing and obvious examples of a systemic
failure by a government entity” in a recent report.
nearly eight month long evaluation of Cayman’s National Pensions Law, and the
regulatory system it created, has determined that the general public has “lost
confidence” in the National Pensions Office and its ability to bring companies
who don’t pay employees’ pensions to justice.
her report, Complaints Commissioner Nicola Williams recommends that wholesale
change is needed to get the pensions system on the right track.
more resources at a broken system is not the solution,” Ms Williams notes in
the summary of the 76-page report, the first she has issued since taking over
the complaints commissioner’s office last year.
OCC identified in January some 670 companies that were delinquent in paying
pensions and said that it intended to look into the entire private sector pensions
system for the causes of enforcement failures.
uncovered since then has revealed an understaffed and overworked National
Pensions Office, excruciatingly slow progress in court when charges were
brought against companies that failed to pay into their employees’ retirement
funds, and an apparent lack of support and communication between government
agencies that dealt with and assisted the country’s private sector pensions
very recently, there was little political will both by the ministry responsible
to implement improvements, and generally…(to) force delinquent employers to
either comply with their pension obligations or to cease trading,” Ms Williams
wrote in her report’s findings section.
recommendations made in the OCC report include:
penalties (both fines and sentences) for non-compliance in paying employee
pensions and the closure of certain loopholes for employers should be addressed
in amendments to the National Pensions Law. Pension funds should also not be
used to pay for legal fees in court cases.
Crown counsel (prosecutor) should be assigned to work solely on pension
enforcement cases, at least for the near term.
inspectors must be given the power to enter any and all businesses to conduct
reviews, even if those businesses are run from a private residence.
who victimise whistle-blowers for reporting pension non-compliance should also
be punished under the law. There should be a ‘tip line’ set up for anonymous
reporting of pension violators.
public education about retirement savings systems by both the pensions office
and the plan providers is needed.
National Pensions Office needs a clear mandate and must not be afraid to use
its powers under the law to the full extent. The office should also be given
pensions office should differentiate between employers who aren’t paying into
worker pension accounts because of simple negligence and those who are
willfully flouting the law by refusing to pay.
must be better communication between the Immigration Department, the Trade and
Business Board and the National Pensions Office on pension-related matters.
sector companies should not be able to bid on government contracts unless their
pension, health care payments and other licensing requirements are up to date.
inspectors need better investigative training to help carry out their duties