Local legislators have unanimously voted for government to consider increasing withdrawal limits for Caymanians to be able to access more money from their pension funds to pay towards mortgage or land loans.
The proposed changes are contained in a motion from Bodden Town West MP Chris Saunders which was passed Friday in Parliament. It is seeking changes to the National Pensions Act to help Caymanians struggling with high interest rates.
Lawmakers voted for government to consider changes to the legislation to allow pension holders under the Act, to withdraw up to $50,000 to apply to their mortgage or land loan. The limit doubles for couples.
They also agreed that government consider changes to allow withdrawals of up to $100,000 to pay off their mortgage in full, with couples able to access double this amount.
They also agreed to changes to increase withdrawals to assist with a deposit on a mortgage or land loan, from $35,000 to $50,000.
Homeowners hurting
Saunders, speaking on the motion, said something has to be done to help Caymanians facing challenges with increasing mortgage payments as interest rates rise.
“Not many people can survive [paying an] extra $1,000, $2,000, $3,000 a month. The government can’t afford people having less money to spend in the supermarkets buying food, for the banks to beget more profit from interest rates,” Saunders argued.
The MP, who said he was able to secure government’s support for the motion by amending some of the terms of the resolutions he was seeking, said reform is needed.
He pointed to the poor performance of pension funds as an example of why change is needed.
Premier Wayne Panton, speaking on the motion, agreed that there are concerns with the existing pension scheme and the returns on the funds, which “leave much to be desired”.
While Panton noted the implementation lawmakers agreed to in principle Friday will have some impact on the pension funds, he said he certainly hopes “there will be the corresponding benefits that allows people to feel some degree of relief from the obligations they’re facing and also be able to exercise certain opportunities but with the controls in place, which would prevent abuse”.
Pension reform planned
Government, he said, support creation of a select committee to review Cayman’s existing pension regime, which he said will help move the process of reform along, as well as look into the impact of the withdrawals that were made during the pandemic.
It will give an opportunity for those impacted by the challenges to testify before the committee, he said, as well as those who operate the funds.
Minister for Labour Dwayne Seymour, speaking on the motion, cautioned that he did not want the public to be critical of MPs allowing another “raid” on pension accounts.
“But when people are hurting we need to act urgently… to help people out of this rut… all of us are hurting. I see this as responsible in responding to our people needs,” Seymour said as he supported the motion.
He said he knows there is a need to make amendments to the existing law.
‘Not fit for purpose’
Opposition Leader Roy McTaggart said that McLaughlin and the Progressives administration had been seeking reform as the existing legislation is not fit for purpose.
He stressed the urgency of the need to undertake a comprehensive review of the pension system.
“The current pension regime needs to be reviewed and a new direction taken to deal with the needs of retired and retiring Caymanians. Most people will unlikely have enough of a pension to live comfortably in retirement over their remaining lifetime. We are seeing that emerge today with the system that we have. It’s an issue now and it will only get worse as we move forward unless it is addressed,” McTaggart said in his contribution.
The pandemic, he said, has made the situation worse.
This, together with challenges identified over the years, McTaggart said, demonstrates the “great need to overhaul the current Pension Act and create a new fit-for-purpose regime”.
He urged that the work to address this begin and a solution agreed upon within a “reasonable” timeframe.
West Bay West MP McKeeva Bush, who also seconded Saunders’s motion, asked that when the select committee begins its work that it consider increasing the existing maximum pension payment of $1,000 monthly.
“It will take that overhaul that we’ve been talking about for years,” he said.
Tourism Minister Kenneth Bryan supported the motion and acknowledged that there will be some criticism of the proposed changes, but he said they have to do something to bring relief.
“We do not want to put the funds at jeopardy,” he said, adding that there are protections in place in the law and provisions for additional payments.
Related Videos
