Editorial for 14 August: Pensions need transparency

We have to agree with the Chamber of Commerce in its review
of the revised version of the Cayman Islands National Pension Law.

There does need to be more transparency and openness. More
people need to be weighing in on such an important matter.

If the proposed bill passes, it will be the first major
revision to the National Pensions Law, which was created in 1998.

But the chamber review has found more than a few flaws in
the bill. It appears the Confidential Relationships (Preservation) Law
overrides provisions within the Pensions Law with regard to openness. In short,
people could find it difficult to garner any information about their pension
funds.

One positive thing in the new law would ensure all companies
operating in the Cayman Islands are compliant.

Employers are required to make pension contributions on
every Caymanian employee between the ages of 18 and 65, and on all expatriate
employees who have been continually working in the Islands for nine months or
more, or who are not employed to do housework in private residences. 

In total, the Pensions Law requires 10 per cent of the
employee’s salary to be paid to an approved pension plan administrator, with at
least 5 per cent being contributed by the employer. That could change in
ongoing talks about the budget, but for now it is law and companies should be
complying.

Unfortunately, this is not happening in all cases. Some
employers are even deducting pension payments from their employees and then not
making the required payments on behalf of that employee to an approved pension
plan administrator on a timely basis, if at all.

What it means at the end of the day – especially for
Caymanian employees – is that they won’t have money “in the bank” to take care
of them once they retire. That puts Caymanians on the government dole.

Unfortunately the bill continues to exclude domestic helpers
from the Pension Law. It’s time that the law governing private sector pension
plans be addressed and fixes made.

 

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