A great deal more openness and transparency is required within the revised version of the Cayman Islands’ National Pensions Law, according to an analysis of the bill done by the Chamber of Commerce.
Among other items, the chamber review noted that pension plan participants were interested in the qualifications of the pension plan advisers and investment managers, members of the board of trustees, and the number of people within the plan who are capable of retiring within the Cayman Islands. Details about the individual who will audit the investment plan should also be known, the analysis stated.
“All of this information for each single- and multi-member pension plan must be available for the public to review on a website and other media,” the chamber review stated.
The review expressed a general concern that the newly formed government Department of Labour and Pensions must communicate all such information with the Cayman Islands Monetary Authority, the pension plan regulator under the new law. However, for any member of the retirement plan, the chamber review notes that the plan must provide any other information “that is relevant” to allow the member to make an informed decision.
“Who decides what is relevant or is not relevant?” the review queried.
Cayman’s oft-derided Confidential Relationships (Preservation} Law also appears to override provisions within the National Pensions Law with regard to openness, the chamber opined.
“Information on pension plans has and will again be withheld using the provisions of the (Confidential Relationships Law),” the chamber review stated. “This provision will result in future problems for workers.”
The chamber recommended deleting all reference to the Confidential Relationships (Preservation) Law from any revised bill dealing with the national pensions system.
“To not do this will deprive most people their rights to information about their pension funds,” the chamber review stated.
The review also pointed out concerns that the current “employee/member centric” focus of the National Pension Law regime would shift if the new pensions law is adopted as proposed.
“There are … some clauses in the existing law and in the revised draft NPL that are in conflict with the predominantly employee/member centric pension regime,” the chamber noted. “To boost confidence in the pension regime [we recommend] making all pension plan operational information available to all persons.”
Proposed legislation to change the National Pensions Law, which regulates private sector pension plans, would make a number of sweeping changes, including raising the minimum age at which pension entitlements can be collected from 60 to 65 years.
The National Pensions Bill 2012 is the first major revision to the National Pensions Law, which was created in 1998. Employment Minister Rolston Anglin has often said the system is simply not working and needs to be overhauled.
The bill seeks to eliminate the National Pensions Office and the board which oversees that office. In exchange, it has created a new government department of labour and pensions and installed the Cayman Islands Monetary Authority as the regulator for the private sector pension plans.
According to the Cayman Islands Complaints Commissioner’s Office, there are nearly 700 local companies that are in some stage of delinquency with regard to making legally required pension payments.