Pension Law changes passed

Legislators have voted unanimously to allow workers to access their pension funds to ride out the current COVID-19 storm.

All 17 MLAs voted in favour of amendments to the Pension Law at 10:37pm on Thursday in the Legislative Assembly, which held its first virtual sitting with some members joining via Zoom.

The amendments were passed on third reading.

During the committee stage, lawmakers extended the sunset clause on the changes to 30 October or any later date to be determined by Cabinet.

Amendments to the Traffic, Immigration, Labour and Customs and Border Control laws were also passed.

Prior to the close of the session George Town South MLA Barbara Conolly was unanimously elected as Deputy Speaker of the LA, replacing West Bay North MLA Bernie Bush who resigned in February.

Original story

Premier Alden McLaughlin laid the Pension Law amendment before the Legislative Assembly Thursday afternoon for debate.

Under the changes, employees will be allowed to access up to 100% of any private pension fund not exceeding $10,000, and 25% of funds in excess of $10,000. The amendments also pave the way for a six-month pension holiday for employees and employers.

In piloting the amendment, McLaughlin urged frugality from those seeking to access their pensions.

“If you do not need it, do not take it because if you spend it, you would not have it,” he said.

He added that the legislative changes were necessary to give a lifeline to local businesses and employees during the COVID-19 pandemic.

Once amended, the changes will run for the next six months, so “everyone need not rush now to draw out the pension out”, the premier said.

“There is going to life after COVID-19. People are going to live and get to retirement again and indeed they will need something to rely on when they get there,” he said.

He said all Caymanians and non-Caymanians, including self-employed residents, will be allowed to withdraw from private-sector pension funds.

It will apply both to individuals on islands and those who left the island between 1 Feb. this year and end of the amendment period.

Civil servants and those claiming early pension are not allowed to make claims.

McLaughlin said there is no need for public servants to access their government pensions because they are all guaranteed their jobs subject to the usual provisions and they were recently granted a 5% increase.

However, he said, while government finances are in a good position now, it is not a “bottomless pit”.

Responding to those calling for access to their public service pension funds, the premier said, while government now can confidently say that no civil servant jobs will be lost or no salaries will be cut, “four months or six months from now, that may not be the case”.

Later on, access to the public service pension may become necessary.

Under the changes, pensions fund administrators will have to present a monthly report on withdrawals.

McLean calls for masks to be mandated

Opposition Leader Arden McLean also spoke during the debate Thursday afternoon.

He said the pension changes are necessary and they is taking Cayman into the next phase of the COVID-19 response – hope.

However, he said, government needs to provide a “road map” to take the country into that next phase of returning residents to a level of normalcy.

“We cannot sit down in our house for much longer. Everyone will go stir crazy,” he said.

He urged large employers to pay for testing of their employees and provide them with masks.

“The onus must be put on the employers,” he said.

“[Masks] must be mandated. We also need to test legislators; we should be leading,” McLean said.

He said the process to reopen Cayman must begin.

“We need to start slowly opening up. We need to start getting this community back on its feet,” he said, adding that the community has to understand that whatever plan is put in place is subject to change.

Under the changes, pension plan administrators are required to notify applicants of their receipt of application within seven days and notify them if the application is approved or refused within 14 to 21 days.

Within 45 days from date of receipt of the application, pension administrators have to issue payment of the requested withdrawal and notify applicant.

The pension providers can refuse an application, but applicants can appeal that decision and refer the decision to the director of pensions.