Unpaid pensions 
running out of time

More than 50 cases of local employers not paying into their workers’ retirement funds may slip through the cracks, if regulators don’t act fast.

According to Acting Pensions Superintendent Mario Ebanks, of 159 current cases involving delinquent pension payments, about one-third have been identified as needing to be “fast-tracked.” This means the National Pensions Office is running out of time to bring prosecution, if that step is determined to be necessary.

The National Pensions Law makes it a criminal offense for employers not to contribute at least 5 percent on top of an employee’s annual salary toward their retirement. Employees must match the 5 percent contribution with money deducted from their salary.

However, the current law, which has been under review in various forms for more than a decade, sets a five-year limit on prosecution of those cases from the time those offenses are detected. That time limit is known as being statute-barred or time-barred.

Mr. Ebanks said six cases of companies not paying pensions to workers have been identified as being time-barred, and he doesn’t want that to happen to the other 52 delinquent cases that are nearing the five-year deadline.

“The fast-tracked cases are those that are being fast-tracked for resolution, or if that fails, we want to be able to submit them for prosecution before the five-year statute bar is up,” Mr. Ebanks said. In attempts to clear up the backlog of 159 delinquencies, Mr. Ebanks said eight pensions officers have been assigned to clear up the remaining files.

Prosecution of pension nonpayment in the Cayman Islands has been agonizingly slow since the inception of the National Pensions Law in 1999.

Under Mr. Ebanks, the National Pension Office – a division of the Department of Labour and Pensions – has started listing information about delinquent pension payment cases, “naming and shaming” the employers who haven’t paid when their cases come to court.

Revisions to the National Pensions Law, last proposed in 2012, envisioned, among a number of other changes, eliminating the statute bar provision entirely.

Although some changes to the Cayman Islands National Pensions Law will be made in 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 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.

“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 states.

Employment Minister Tara Rivers told the Legislative Assembly last year 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, is the “issue of severity of noncompliance” addressed in the legislation by different penalties based on level of delinquency of each company.

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