Pensions board must cough up 2008 data

After more than three years and two separate appeals to the Cayman Islands Information Commissioner’s Office, the Public Service Pensions Board will be compelled to release information related to its financial status.  

The actuarial report dated 1 January, 2008 – now more than four years old – was first sought by the Caymanian Compass in early 2009. The newspaper’s open records request regarding the data in 2009 was deferred pending the records’ planned release in the Legislative Assembly.  

Up through Tuesday, that release still had not occurred.  

A second request made through the Freedom of Information Law has led to another appeal before the information commissioner. This time, Information Commissioner Jennifer Dilbert has instructed the board to either release the records or seek judicial review of her decision by 21 June.  

“[The Public Service Pensions Board has] not demonstrated … that they acted in accordance with their obligations under the law,” Commissioner Dilbert wrote in her decision on the matter. “I also consulted … Legislative Assembly Standing Orders … but I can find no provision that restricts access to a record such as the one under review in this instance, prior to tabling in the Honourable House.”  

Mrs. Dilbert also noted that the financial evaluation, completed in March 2009, has been finished for more than three years and that requirements to “immediately table” the report before the Legislative Assembly in the Public Service Pensions Law had not been met.  

“The primary purpose of the [actuarial] review is not to present a report on it to the financial secretary and the Cabinet, but to assess and evaluate the viability of the fund,” Mrs. Dilbert wrote.  

The Public Service Pensions Board oversees three separate retirement funds for public sector workers in the Cayman Islands. The largest is the fund for civil servants and is split into two groups; those who joined the service before 2000 and who are in the defined benefit plan and those who joined the service in 2000 or after and are in the defined contribution plan.  

The board also manages retirement funds for local judges and members of the Legislative Assembly.  

 

Some details out 

The documents have been held for so long, some details contained in the 2008 report have already been made publicly available.  

One recommendation included in the actuarial report was for pension contributions made to some civil servants’ retirement savings plans be increased to nearly 45 per cent of their total salaries and emoluments.  

The recommendation was made only for civil servants who participate in the government’s defined benefit pension plan; those that will receive a monthly pension payment after retirement. All civil servants participating in the defined contribution retirement plan would only need to increase their pension contributions by 1 per cent, according to actuaries – essentially going from the current 12 per cent of salary to 13 per cent.  

“The actuary recommended that the basic 12 per cent employee/employer contribution rates be increased by 32.9 per cent for the defined benefit and 1 per cent for the defined contribution components of the plan,” read the statement on the 2008 actuarial evaluation contained in the Public Service Pensions Board 2010 annual report.  

Any recommendations to increase to 45 per cent of salary and emoluments the contributions to the defined benefit participants in the civil servants retirement plan would either require those contributions to come out of the workers’ salaries – which could mean a 39 per cent of salary contribution for defined benefit plan participants; or would require government to pay those costs on behalf of the workers.  

Currently, government contributes 6 per cent of a civil servant’s salary above and beyond their normal pay to the retirement fund and civil servants match that contribution with a 6 per cent contribution of their own.  

The reason for the huge recommended increase in payments into the civil servant retirement system is that the 2008 actuarial evaluation noted a significant unfunded liability within the plan.  

“The actuarial valuation calculated a fund deficiency as at 1 January, 2008 of $192,310,713,” the pension system’s 2010 annual report noted.  

The report calculated a past service liability within the fund of more than $435 million, while fund assets totalled $242.7 million. The report subtracted the fund assets from the liabilities to arrive at the $192 million unfunded liability figure.