During the past decade, as successive Cayman Islands governments sought to amend laws related to private sector retirement savings plans, the government regulator for those plans was not able to release vital public information about the pension system.
Annual reports providing details of the growth of private sector pension investments, the amounts paid into and out of those investment funds, and the number of companies that were delinquent in paying into pension funds have not been released in the Legislative Assembly since the government’s 2007-2008 budget year.
The reasons for this delay in reporting required private sector pensions data depends on whom you ask.
“The National Pensions Board prepared many of these reports, but they were not acceptable to successive ministry [staff] and ministers, because they spoke the truth about the malregulation of the pensions regime,” former National Pensions Board member William Adam said. “Therefore they were not sent to the Legislative Assembly.
“What is known is that the malregulation has caused employees to lose literally tens of millions of their pension funds,” Mr. Adam said in response to Cayman Compass questions on the matter.
Current Department of Labour and Pensions Director Bennard Ebanks denies Mr. Adam’s allegations of poor administration and said that despite the global financial recession in 2008-2009, the private sector pension funds being managed in Cayman have grown from approximately $526 million in invested assets as of mid-2008 to about $1.2 billion invested currently.
Mr. Ebanks said the department is now trying to turn in all the outstanding annual reports – nine years’ worth – to the Legislative Assembly by the first quarter of this year. The assembly is expected to start meeting on March 14.
“The delays in the filing of the annual reports are due to a variety of factors, including the need to modernize the presentation of the reports, a decision to expand the content of the reports, as well as the impact of staffing levels and changes within the department,” Mr. Ebanks said. “The reports were not deemed to be acceptable as the overall presentation and professionalism of the annual reports was an issue.
“A decision was made to not table individual reports, or release a subsequent report, without the previous report in order to give proper context, whether that context was favorable to pensions or not.”
Mario Ebanks, who formerly held Mr. Bennard Ebanks’s position at the Department of Labour and Pensions, said he was informed of the unpublished reports when he took over the office in 2012.
“I cannot explain why this [delay in reporting] was allowed to happen, given that the National Pensions Law requires the annual reports,” Mr. Mario Ebanks said. “Much of that information would also be available to the public if employees who are members/participants of pension plans were to attend the annual general meetings of their respective pension plans – particularly the six multi-employer pension providers.
“However, attendance, participation, and close oversight by pension plan members has historically been pathetic,” Mr. Mario Ebanks said, adding that in absence of government reporting, the 2016 amendments to the National Pensions Law required that “more robust” information be given to plan members by the administrators.
From Mr. Mario Ebanks’ perspective, the issue came down to resources: “My concern was always that from its inception, sufficient resources were never allocated to the National Pensions Office. Additionally, it was not clear whether the decision-makers and funders of the National Pensions Office truly understood the exact roles, challenges, skills needs and technological systems which the office needed in order to properly do its job.”
“Pathetic” attendance was also noted prior to the passage in the Legislative Assembly in May 2016 of the amended version of the National Pensions Bill, 2016.
That legislation underwent a period of lengthy public consultation. Then-Employment Minister Tara Rivers, who had responsibility for the subject under the 2013-2017 Progressives-led administration, noted a series of public meetings held on the issue, public radio and television appearances where government officials explained the relevant changes and the receipt of more than 450 comments on the proposal from 40 different sources.
The public meetings held in July and August 2015 received “little turnout” according to attendees from the various pension administrators.
Despite a low meeting turnout, some of that commentary led to significant amendments to the proposed legislation and showed the government “very much tried to balance the interests and concerns expressed” in drafting the bill, Minister Rivers told the Legislative Assembly in May 2016.
The amendments to the National Pensions Law, which had not seen such wholesale overhaul since the legislation was first enacted in 1998, sought to address a number of issues brought on by years of underfunding, rampant delinquency in payments to workers’ accounts, uneven enforcement and sometimes slack oversight.