Full-scale pensions review due by 2016

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Although some changes to the Cayman Islands National Pensions Law will be made within the government’s current fiscal year, a full-scale revamp of the now 15-year-old law will not be completed until 2016.  

That’s according a letter sent out by the Ministry of Employment on Monday, Oct. 7 obtained by the Caymanian Compass. 

“The new Minister for Education, Employment and Gender Affairs has ordered a comprehensive review of the National Pensions Bill to be presented to Cabinet for approval before proceeding back to the Legislative Assembly,” the letter states. “This review, which is to be completed by June 30th, 2016, will no doubt make some changes to the bill, but it is not envisioned that these changes will affect the items being recommended by the complaints commissioner.“ 

Complaints Commissioner Nicola Williams announced last Wednesday that severe non-compliance by local business with the National Pensions Law had worsened since a 2010 report from her office identified 670 employers who were in arrears on contributions to employee retirement plans.  

That number, by June 30, 2013, had grown to 1,144 delinquent businesses that owed about $13.7 million into the various private sector retirement plans managed within the Cayman Islands.  

Ms Williams also noted that the government had still not complied with 11 of her 21 recommendations aimed at repairing the private sector pensions regime, more than three years after her office’s initial report on the matter.  

“In the interim, the minister has asked for a shorter-term review of the [National Pensions] Bill so that essential items can be addressed during this financial year via amendments to the current pensions law,” the Oct. 7 letter from the ministry read. “The recommendations made in the complaints commissioner’s report will be included for consideration in this round of amendments.” 

Employment Minister Tara Rivers told the Legislative Assembly Friday that a revised National Pensions Bill, completed toward the end of the previous United Democratic Party’s term in office, would not be carried forward as it existed at the end of former Employment Minister Rolston Anglin’s term.  

“The current bill … contains provisions which are inadequate or not in keeping with the policy direction of this government,” Ms Rivers said. “Thus, the government is committed to bringing forward major legislative changes through a revised National Pensions Bill, which addresses the commissioner’s concerns and reflects our policy position as it relates to the private pensions regime.  

“It is indeed unfortunate that the revision to the National Pensions Law has taken such a long time to enact,” the minister said.  

Among the issues that will be addressed in the short-term, according to Minister Rivers, would be the “issue of severity of non-compliance” addressed in the legislation by different penalties based on level of delinquency each company maintains.  

Although more than 1,100 companies are now in violation of the National Pensions Law with regard to paying into employee pension accounts, Ms Rivers said nearly half of them are between 45-60 days behind payments and are generally expected to catch up within the next few months.  

The 2012 legislation wasn’t all bad, Ms Rivers acknowledged. “Some of the changes proposed in the 2012 bill are critical to protect and educate pension plan members and the general public as a whole and to modernize our pension regime. However, it is only reasonable to recognize and expect that this draft legislation will need to be scrutinized and amendment to ensure that it reflects the policies … of this new government.” Ms Rivers did not specify what amendments would be kept from the old legislation and which items would be discarded.  

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Ms Rivers
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3 COMMENTS

  1. So why are we waiting at all. We know that the laws are being broken, peoples lives are possibly being ruined and we are waiting until 2016, 3 years from now to do a review. Get your heads out of the sand or wherever else there may be.

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  2. Hmm. The private sector is 14 million delinquent in pension contributions with enforcement and prosecution threatened for those dirtbag employers that fail to make the required contributions, use the money for their own purposes and doom their employees to a retirement in poverty.

    The largest employer in the Country has an unfunded pension liability of 166 million. But wait, that’s ten times the amount reported in this story. That can’t be right.

    It is as the largest employer in the Country is Government, and it’s defined benefits pension scheme is this amount underfunded and would require contributions to go from 12% of wages and salaries to 44% to properly fund the scheme. Payments and expenses are expected to exceed contributions this year and the scheme is predicted to be depleted by 2026.

    So good people of the Cayman Islands, do as Government says, not as it does.

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