Employers must keep records seven years
Employment Minister Tara Rivers began her round of public meetings about the National Pensions Law on Monday night in North Side.
Director of Labour and Pensions Mario Ebanks, who served as moderator, told the small but attentive audience in the district civic center that the ministry’s road trip “is also a listening tour.”
Everyone in the audience had access to a copy of proposed amendments to the pensions law plus a four-page summary. Ms. Rivers referred to both, along with text projected on a large screen, explaining the intended changes. She pointed out that the National Pensions Law is just 17 years old and that government wants to build on efforts to have a culture of compliance that will benefit both employers and employees.
Some of the key changes affecting employers will include a requirement to keep specific records for seven years. Among the changes impacting employees are an increase in the age at which individuals are entitled to access their pension.
Employers would be obligated to keep proper records relating to pensionable employees. Required information would include name and date of employment; gross and net pay; all pension deductions; and all pension contributions. Such information would have to be retained for a minimum of seven years.
The new law would permit the director of Labour and Pensions to share information with other government departments. For example, when a business applies to renew its Trade and Business License, it would require a valid up-to-date pension plan and a policy of health insurance for employees in order to get renewed. Where the employer is a company, officers concerned in management can be held responsible.
For employees, “normal retirement age” would be replaced by “normal age of pension entitlement,” which would be increased from 60 to 65. Early retirement would still be an option.
“We’re living to age 83, on average,” Ms. Rivers pointed out, and people may want or need to work past 60. For people at or near 60, the 17 years of pension contributions may not have accumulated enough to provide sufficient income after leaving the work force.
It is generally accepted that retired people need 60 percent to 70 percent of their pre-retirement income, the minister explained. With an increase in age and an increase in the amount of earnings on which pension contributions would be calculated, the pre-retirement income an employee could look forward to would be in the range of 57 percent to 78 percent.
At present, Ms. Rivers noted, employees and employers are required to pay pension contributions on earnings up to $60,000. That cap would be increased to $87,000, an inflation-adjustment figure.
The definition of employee would be amended to exclude people who work fewer than 15 hours per week, meaning that these individuals would no longer be pensionable.
North Side MLA Ezzard Miller expressed concern that someone could be working 14 hours per week for four different employers and not have a pension.
Ms. Rivers explained that this change was meant to help individuals seeking part-time work, as employers might then be more willing to take them on.
Mr. Miller also did not agree with a cap for the income on which pension contributions are based. He thought there should be no cap.
Several people in the audience agreed with him on this point, as well as proposed changes for the time frame in which Caymanians and non-Caymanians would start paying pension contributions.
There is inequity in the current situation, since pensions are payable for non-Caymanians only after nine months. Ms. Rivers said the new law would remove the requirement for pension payments for the first six months of a person’s employment, whether Caymanian or non-Caymanian; this time frame would be consistent with typical probation periods, Ms. Rivers noted.
Mr. Miller disagreed. “Everybody should pay from day one,” he said.
Other proposed changes pertain to an employee’s ability to obtain funds from his or her pension account, the issue of moving from the private sector to the public sector, and changes in criteria for transfer of pension benefits outside Cayman.
Public meetings on the National Pensions Law continue at the Savannah Primary School, 7:30 p.m. on Thursday, Aug. 6; East End Civic Centre, 8 p.m. on Monday, Aug. 10; Sir John A. Cumber School Hall in West Bay, 7:30 p.m. Wednesday, Aug. 12; George Town Town Hall, 7:30 p.m. Thursday, Aug. 13.