At least a dozen complaints filed with the former Cayman Islands National Pensions Office by individuals alleging that payments into their personal retirement fund were not made by employers may constitute criminal violations.
But they will never make it to court.
That’s because those complaints were made more than five years ago and are now “statute barred,” meaning the time limit for those matters to come before the court and be disposed of in one way or another has passed.
Department of Labour and Pensions Director Mario Ebanks said his staff is now “fast tracking” another 114 such complaints that are in danger of being time-barred.
“The longer we take to go after them, the clock is ticking,” he said.
Mr. Ebanks said, as of June 30, there were 377 backlogged complaints that had been reviewed or “discovered” by the pensions office. According to the department’s review, some of the complaints did not amount to violations of the National Pensions Law, while others may have been violations but had simply run out of time. Still others were being forwarded to the director of public prosecutions for further action.
The Cayman Islands National Pensions Law requires all private sector employers to contribute toward a retirement plan for both Caymanian and non-Caymanian workers. The minimum contribution to those plans is a 5 percent payment taken from the employee’s salary and a matching 5 percent contribution from the local employer. The required contributions go up to $60,000 annual salary, for maximum total of $6,000 placed into the retirement fund of any worker each year. Employees can put in more toward their own retirement plans, if they wish.
Public sector pensions are governed under separate legislation, known as the Public Service Pensions Law.
The often arduous task of pursuing nonpayment of legally required pension contributions has been well-documented in the Cayman Islands and has led to several calls to reform the government’s existing legislation.
One such attempt by the previous United Democratic Party government in 2012 failed to make it to the floor of the Legislative Assembly. The UDP was only the latest government administration to flop in its efforts to revamp the National Pensions Law within the past decade.
According to former Employment Minister Rolston Anglin, the new Progressives-led government was left a mostly finalized draft copy of the revised National Pensions Law by the outgoing UDP administration.
“It will be available for consideration following the May general election,” Mr. Anglin said at the time.
The proposed legislation would alter in many significant ways the existing National Pensions Law, which regulates private sector pension plans, including raising the minimum age at which pension entitlements can be collected from 60 to 65 years. The National Pensions Law was created in 1998 and has never been revamped.
According to the Cayman Islands Complaints Commissioner’s Office and the Department of Labour and Pensions, there were nearly 1,150 local businesses in some stage of delinquency with regard to making legally required pension payments as of June 30, 2013.
One major change under the 2012 legislation would be the introduction of a fixed penalty system for noncompliant private sector companies. After an investigation, the Department of Labour and Pensions would be able to issue a ticket – similar to what occurs with a traffic offence – to the offending employer, carrying a penalty of $1,000 to $5,000. The person receiving the ticket can request a trial or accept liability. If the person ignores the ticket, the matter will go to court with potentially higher penalties, the bill proposed.
The new legislation also stipulates protections for employees who report their employers for noncompliance with the Pensions Law.
The bill would require that employers maintain pension records for seven years and also requires the pension plan administrator to notify members – in addition to the regulator, as is required now – if their employer is not complying with the Pensions Law.
The Progressives-led government has listed the National Pensions Bill, 2012, as one of its legislative priorities during the next year in office.