Patience urged on pension withdrawals

FAQ: Pension holiday and withdrawals

Deputy Director of Pensions Amy Wolliston has called for patience as thousands of employees and employers seek to make withdrawals from private pension fund providers.

Wolliston, speaking at Wednesday’s daily COVID-19 press briefing, said that, following changes last month to the Pension Law to allow for the withdrawals, providers were inundated with requests.

“The week of 20 April, as a group, they received 6,000 requests. I don’t mean applications, I mean requests, communications, emails, phone calls, etc. … Last week they got 8,200 more,” she said.

Wolliston said while she appreciates that members of the public are “anxious to get an answer”, they should realise that the providers also have had to gear up for the legislation coming into effect, as the changes were implemented just a week after being passed in the Legislative Assembly.

“We’re all in a bit of an adjustment here in order to accommodate the government’s policy and the government’s decision … everybody is doing their best in order to implement the legislation as quickly as possible,” she said as she fielded questions from the media.

She added that an updated withdrawal form has been uploaded to the Department of Labour and Pensions’ website, after complaints regarding the original form. She assured the old forms will still be applicable and there is no need to re-file.

She added that the department planned to provide copies of the forms to supermarkets and post offices so members of the public can collect them there.

“In addition, the administrators, most of them, are having to facilitate drop boxes in order to receive the forms once they’re completed, and they will also have hard copies available outside their offices for people to pick up,” she said.

Pension administrators, she pointed out, are aware they are obligated to provide a mechanism for applications to be physically dropped off.

Public concerns on withdrawals explored

Over the past few weeks, the Cayman Compass has received numerous complaints about pension providers not answering calls or emails, and myriad other concerns, but Wolliston urged understanding on the part of those seeking the withdrawals.

“Just because you didn’t get an answer 24 hours after you asked the question does not mean anybody is intentionally ignoring you,” she said. “I’m just saying people need to have a little patience, that’s all.”

The deputy director also addressed concerns about providers rejecting applications.

She said a refusal of an application could be as a result of the applicant failing to provide all of the necessary information in order for the administrator to process the application or an issue with a notarised ID.

“It would also be, for example, if it was a public servant and they were seeking to withdraw contributions paid for by a statutory authority or a government company. Those are expressly not permitted, so therefore that application would also be refused,” she said.

Outside of those examples, there should be no issues with granting of applications, she said, adding that if the application is refused, the aggrieved party can write to the Director of Pensions for assistance.

She also stated that notarised driver’s licences can be used with the applications. When it comes to colour or black and white copies of those documents, she said, the main point is it should clearly visible. There had also been complaints about service providers not accepting black and white copies of notarised driver’s licences.

“They must be able to read your name and see the picture, etc.,  in order to be able to identify that it is actually you. So those are the critical parts that need to be addressed in terms of making the application. I am aware there are a few questions regarding black and white copies and color copies. Those issues are a bit of fine-tuning that we’re still working on. So those matters, we want to absolutely clarify those,” she added.

Wolliston also clarified that account holders can apply to have access to funds even if they have stopped paying into a pension account.

“It doesn’t matter whether the account is active or inactive in order for this process to occur,” she said.

Notary fees stipulated by law
Another area of concern flagged by the public is excessive fees allegedly being charged by some notaries.

Wolliston said, from speaking to a few notaries, she noted that fees are more in line of $10 to $15, which is “the kind of fee you should expect to pay – nothing exorbitant”.

However, she said, if an applicant needs assistance in filling out paperwork, then the notary may ask for a little bit as payment.

Premier Alden McLaughlin also weighed on the issue of notary fees, saying that the amount to be charged by notaries is prescribed by the law and the regulations “for witnessing the execution of the document”.

However, he hastened to add that if notaries are asked to do more jobs outside of witnessing documents, then that is a separate matter.

He said, they are within their right to say “I’m going to charge you so much an hour or so much for each document that I assist you to complete.”

“That’s not a notarial function of theirs. Their function under the law is to witness the execution of documents and by doing so to sign their names and fix their seals and the fee for that particular service is prescribed by the law and the regulations and it is not hundreds of dollars,” the premier said.

He added that justices of the peace can carry out the same function.

Pension repayments

Wolliston said while there is no requirement to repay the sums being withdrawn, she urged those seeking the funds to consider making additional contributions when they can.

“The public should recognise that if you’re withdrawing these funds from your pension account, the funds will not be there later in retirement,” she said. “So therefore, people are highly encouraged to replace the funds if they can do so, even if that’s done over time, because if you take it out, it will not be there later because there will be nothing left for you to receive in retirement.”