It’s hard to believe, but 10 years after the Pensions Law came into effect, there are still employers in the Cayman Islands who apparently think contributing to their employees’ pension plans is an option that employees can opt of out.
It’s not.
Employers are required to make pension contributions on every Caymanian employee between the ages of 18 and 65, and on all expatriate employees who have been continually working on the island for nine months or more, or who are not employed to do housework in private residences.
In total, the Pensions Law requires 10 per cent of the employee’s salary to be paid to an approved pension plan administrator, with at least five per cent being contributed by the employer.
Unfortunately, this is not happening in all cases. Some employers are even deducting pension payments from their employees and then not making the required payments on behalf of that employee to an approved pension plan administrator on a timely basis, if at all.
This, ultimately, is a form of worker exploitation that gives the Cayman Islands a bad name because it deprives employees of something that is rightfully theirs by law.
It also puts law-abiding employers at a competitive disadvantage because they are paying expenses law-breaking employers are not. This can allow unscrupulous employers the ability to underbid on jobs because they don’t need as much revenue to pay expenses.
The National Pensions Office and the National Pensions Board recognise there is a problem and they are determined to make employers fall in line with the law. They also want pension plan administrators to make sure employers pay interest penalties if they do not make pension payments on time.
However, the National Pensions Office can use your help. With only three inspectors to police all of Cayman’s employers, some cases of non-payment of pensions might take time to uncover. The NPO is therefore asking employees in Cayman to check their pension statements and cross-reference them with their payslips to ensure pension payments have been properly deducted and the correct contributions have been paid to the plan administrator. Any discrepancies should be reported to the National Pensions Office immediately.
Whether an employer or employee agrees with the National Pensions Law or not is immaterial; it is the law of the land. We support the NPO’s efforts to make sure that law is obeyed.
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