Pension plans remain under regulator’s watch

Two of Cayman’s six privately managed retirement investment plans remain under administrative orders issued earlier in the year by the National Pensions Office, the Cayman Compass has learned.  

Acting Pensions Superintendent Mario Ebanks confirmed this week that a cease and desist order against Bahamas-based insurance company BAF, which administers the BAF Cayman Pension Plan, had remained in place and was augmented on Oct. 31 with new conditions attached to the order. 

Mr. Ebanks did not specify the nature of the new conditions under which BAF is operating.  

Meanwhile, the Chamber Pension Plan, which had an administrative order issued against it by the pensions office in February, has yet to fulfill all of the terms required by the notice, Mr. Ebanks said.  

BAF, which purchased British-American Insurance Ltd. in 2009 after British-American went into receivership, now operates the pension plan as well as the former company’s health insurance and life insurance businesses.  

Mr. Ebanks said the renewed cease and desist order still only applies to any new business taken on by BAF. The company’s approximately 3,600 current pension clients should not be affected, he said.  

According to a statement issued earlier this year by the National Pensions Office: “Since it assumed the role of administrator, BAF Insurance Company and the [Cayman Islands] National Pensions Office … agreed on a host of remedial actions which needed to be undertaken to bring the former [British-American Insurance Company] Pension Plan, which BAF [Cayman] Pension Plan succeeded, into full compliance with the National Pensions Law and regulations.  

“A detailed action plan was agreed in October 2009. Regrettably, several of those important requirements have still not been achieved by BAF, despite various efforts which were intensified since early in 2013.” BAF officials have maintained that the company continues to cooperate fully with the Department of Labour and Pensions, which manages the National Pensions Office, on the matter. It has assured existing pension clients that their investments are secure.  

Mr. Ebanks noted hat the Chamber Pension Plan, the largest private sector retirement investment scheme in the Cayman Islands, has made significant governance improvements since the National Pensions Office issued its administrative order against the plan in February, appointing a new board of directors via a vote of the plan membership in May.  

However, the acting superintendent also noted that the Chamber plan had not come into compliance with section F of the order from the National Pensions Office. That section sought a full forensic audit of the pension plans’ controls and investment management, an actuarial evaluation and other proofs of governance best practices including “proper record keeping of retirement savings arrangements … withdrawals and repayment tracking monitoring and membership arrears payment plans.”  

Earlier this month, Randall Fisher was appointed as chief of operations for the Chamber Pension Plan. The plan’s board of trustees also named a new chairperson to succeed Eduardo Silva when his term expires.  

The National Pensions Law gives the government’s enforcement authority wide powers to ensure compliance with retirement plan requirements. Mr. Ebanks said the pensions office can remove plan administrators and appoint new ones if orders from the office are not followed. He said the office can also file court orders to get injunctions against the plan administrators, but noted it had not done so in either of these cases.  

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