June end for pension holiday

Cayman’s pension holiday will come to an end on 30 June, government has announced.

Premier Wayne Panton, in a statement Tuesday night, said while the it had been helpful to individuals and businesses to suspend the pension requirement during the past two years, “we are now at a point in time where it is in the best interest of employees, to resume the funding of their pensions”.

Government announced that Cabinet authorised a final extension of the national pension holiday, in accordance with section 1(3) of the National Pensions (Amendment) Act 2020.

Pension payments are required by law but in April 2020, as a COVID-19 relief measure, the Alden McLaughlin-led Progressives administration suspended payments exempting employers, employees, and self-employed individuals from making mandatory contributions to pension plans.

However, Panton said it is time to resume those contributions.

“It is the responsible approach to adopt given the improving economic environment and the Government is providing advance notice of this to allow employees and businesses to prepare for the resumption of these payments starting July 1st, 2022,” he said.

As with the previous pension holidays, government-owned companies and statutory authorities are excluded from the Cabinet Order, the statement said, which means they must continue to make pension contributions to their respective plans.

Deputy Premier and Minister for Labour Chris Saunders said the pandemic created challenges for both employees and employers as well as those currently seeking employment, and the additional extension will help.

“With the relaxation of some travel restrictions, the resumption of commercial airline flights and the upcoming reintroduction of cruise tourism, the decision to extend the pension holiday for another three months was made to allow additional time for businesses to grow to full strength as the country reopens,” he said in the release.

The Department of Labour and Pensions, through the statement, added that voluntary pension contributions can be paid into pension funds.

“Either the employee or the employer may opt to pay voluntary pension contributions, however, the other party is not required to contribute as well,” the department said.

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