Pensions raid now legal

| 09/10/2011

(CNS): Government has passed a bill to allow Caymanians who do not own their own property to raid their own pension funds to use as a deposit to buy a home or land on which to build one, or to pay off their mortgages. Based on the theory that those trapped in rental property when they retire will have to spend a large portion of their pension on rent or become a burden on the state, government believes withdrawing a sum of cash before retirement will help them in the long run when they finish their working life. However, pension firms have expressed concerns about what could be a devastating impact on the final funds and the opposition has said the bill will not save homes as the public have been led to believe it will.

Following passage of the bill in the Legislative Assembly last month, pension holders will be able to take a bank agreement to their pension administrators and withdraw up to $35,000 depending on the cost of the property purchase or outstanding mortgage loan and the amount they have in their funds. Those choosing to raid their pension for a home will be required to pay additional contributions of 1% and if they sell the property before they retire they will need to pay back the full amount borrowed.

“We need to give people as many tools as possible to access property ownership,” said Rolston Anglin, the labour minister who has responsibility for pensions. He added that there can never be too many ways to help people buy their own homes. With access becoming increasingly difficult for many people, he said this amendment to the law may help to change some people’s lives.

The minister spoke about how important adequate housing is to society at large as he revealed that most of the children in the education system who were on the at risk list lived in poor housing conditions.  “Anything that can assist in home ownership is crucial,” Anglin told his legislative colleagues.

While one or two people may be placed at a less than “advantageous position as it relates to their ultimate retirement”, he said that could be justified and was “surely worth it” if their children's life chances are improved now.

Opposition Leader Alden McLaughlin said that he and his colleagues would not vote against the bill as he felt many of the dangers raised when the idea was first proposed in the LA over a year ago in a private member's motion were addressed, but he said the PPM was not particularly enthusiastic about it as he did not think very many people would be in a position to benefit from it.

McLaughlin warned government that many people were likely to be disappointed because they were expecting that they would be able to access their pension fund to pay off mortgage arrears to save them from losing their homes. He noted that this would have been a dangerous proposition but, nevertheless, expectations for that had been raised.

He pointed out that most people who are struggling with arrears at present probably owe much more than $35,000 in total on their homes so it would help only a few people to save their homes. He also noted that the government assisted mortgage scheme already provided a method for Caymanians to access a deposit to buy a home without having to risk their retirement.

“This bill has very limited utility given the various protections that have had to be put in place and we need to manage expectations,” he warned as he pointed out that the community had seen this move by government as being something very different from the actual end result.

McLaughlin offered his support because of the protections that he said the minister had put in place and commended the careful crafting of the legislation, which he said would be very unlikely to see a run on pension funds.

He said it was important that the message went out that anyone who decided to take money from their pension would have to find a way to put it back before they finished their working life or they could be facing a bleak retirement.

Before the vote was taken on the bill Anglin said that the amendment came ahead of further major legislative changes to the law that governors private pensions, including improving compliance. He also noted that the retirement age would be moved to 65 shortly, which would give people taking advantage of this legislative change the chance to pay in more money into their funds before retirement.

It is only private sector pension plans that will be affected at present but the minister said he would encourage those in charge of the public sector pension plan to allow civil servants access to their pensions as well.

Although the minister said the pension sector and the National Pensions Board had been consulted and government had taken on board many of the suggestions made, it is understood that there are significant concerns about the bill in the industry and the pension’s board has not offered its support to the change in the law.

See the National Pensions Amendment Bill 2011 here.

Category: Business

Comments (76)

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  1. MER says:

    what about those who are already retired and need their pensions for food??? Once again cayman caters to only the people who already have at least their shoulders out of the water!

  2. Peeved says:

    I thankfully left Cayman at the beginning of the year – I see it is still very much a Banana Republic … or was that a 2 by 4 … either way … and of course no expat can touch their pension money for two years after they leave because: "it would result in the pension funds being placed under too much pressure to pay out that kind of money".  Or so I was told when I questioned why. 

    Now they're authorising people to take up to $35,000 at a time to "help" them with a mortgage.  My thinking is: If one can't save enough money for the deposit for a morgage then how is one going to afford to pay the monthly payments on that same mortgage?  Or is government not too worried about that side of things.  I can see the banks smiling over this – this will give them more properties to foreclose in the future.

    My personal concern is: I wonder just how much money, if any, is going to be left in the pot in 1.5 years time when I can finally get my paws on my money.

  3. Anonymous says:

    I'm Caymanian in my late 20's. I'm about a year off owning my car which I purchased brand new 3 years ago. Ppl might say a new car is a waste of $$$ and I agree in a sense as the value depreciates like crazy however; I take comfort in knowing I shall have a realible car for years to come. I don't have a mortgage and I certainly don't have anything near $35k in pension so even if I thought this idea made sense I'd still could not approach the bank. I do have some saving's but nothing subtantial enough to burden myself with a mortgage and deplete the little funds. It would have made more sense for them to allow ppl with pension under $5k to redeem it for w/e reasons; especially those unemployed at the moment.

    • Anonymous says:

      You can withdraw UP TO $35,000.

      That means, for example, you can with $1, $10, $100,$1000, $10000 etcetera.

      So if you need $5,000 to get a Deposit for a piece of land – and you have $5000 – you could, if you wanted to, withdraw the $5,000 to use it as a Deposit.

  4. Anonymous says:

    Just be mindful of two things:

     

    The pension system is designed for you to have income post retirement, so if you borrow against it, and are unable to pay it back what happens then, you are SOL

    There is no defined social security/national insurance scheme in Cayman, and your Government is already financially strapped, what will they be able to do for you, probably nothing so you'll be SOL.

    Short term fixes result in long term problems.

    • Anonymous says:

      I see the PPM and Pension Fund Administrators are posting hard on this.

  5. Anonymous says:

    Responsible adult investors will be aware that their pension assets are already 30% smaller than they were last quarter.  We would now allow people to book those paper losses en masse and force a run on our local pension providers?  What will that do to the pension NAVs for the good and responsible remainder?  This proposal is nothing short of theft from the mouths of pensioners.  The entire pension scheme looses credibility if this is allowed to take place.

    • so Anonymous says:

      Your right but this is Cayman.  Credibility is no longer held in any regard and for good reason.  Its "take what you can and give nothing back" time.  A lesson started by Caymanian "leaders".

  6. Anonymous says:

    Pension "Holiday"

    A UDP Pied Piper Plan!

    Pension "Withdrawal"

    Another UDP Pied Piper Plan!

    What's next UDP – A $#@!% Pension Party?

    Worhty cause, yea, right.

  7. Anonymous says:

    There is an old proverb – A fool and his money are soon parted. That is exactly what is going to happen to anybody who takes money out of a pension to invest in land that will go down in value. Property prices are high at the moment compared to where they are going.

  8. Anonymous says:

    Haters and PPM cronies will oppose this legislation and anything that they believe will benefit Caymanians.

    The simple fact is that investing in Land is a good investment – now Caymanians can invest in Land – as opposed to losing it on some stock market somewhere around the world

    • Anonymous says:

      Poster, my issue is when they take the money out and use it on land or some dwelling and then STILL come back to Govt for handouts because they are lazy or dont know how to manage their money properly.

       

      I mean, ask yourself, who are the majority of the persons that this plan is suppose to help? In my view the majority are persons that can't manage money well in the first place, so giving them more money alone is not solving the problem

      • Anonymous says:

        This is why in the States you can also take out from your retirement savings for other reasons as well, like medical expenses.

         

        I had a very good paying job before I (and thousands of other Government workers) was laid off due to Lack of Work. And after I started bleeding through my ears and they had to put 3 holes at the top of my spine to drain the brain fluid off of swelling around my brain, I was not able to work for a long time, and could only move my eyes and nothing else…couldn't even move my head from side to side, completely bedridden.

         

        Small miracles happen and I am still here against all odds from nothing rupturing which could have been fatal, but everything that I contributed would have basically been depleted because of the de-valuation of the stocks and the hard hit investment funds took after the market crashed. So, in my mid-40's, I had to start contributing to my retirement all over again, and I plan on replenishing it and contributing the maximum that I can. But I am SO glad I withdrew my money, because I personally know of other co-workers that have lost close to US$100,000 and they didn't touch their money, it was just because of loss in portfolio value.

         

        Sometimes life doesn't go according to the way we start out planning, and sometimes what we’ve set aside for retirement must be used earlier than expected. At least I am glad that I got to use my retirement money at a time when I desperately needed it, instead of just looking at the quarterly and annual statements telling me I have nothing left.

      • Anonymous says:

        Your questions, incorrectly, is based on the assumption that the only persons that will withdraw their funds are those destined to go to Government for help in the future – and I dont see how you can be so sure of that.

  9. Dred says:

    First let me start by saying I am not fond of the header of this topic as it has HIGHLY negative cannotations. To call it a "raid" associates it with words such as:

    Forced Entry

    Robbery

    Invasion

    Attack

    Break-in

    Until you have experienced one of these you will not have the full appreciation of why this is wrong to say. It's like using the word RAPE when classsifying what CUC does to us.

    And honestly this is not a completely bad thing. I am a firm believer that people should have options on the table. The problem we have all had is that we are locked into whatever the government wants to do and quite often we find the government so out of touch with what can be done.

    During the financial crisis of two plus years ago I lost 40% to 50% of my pensions. This is what forced pension contributions did for me and most of us. Now it makes no sense now crying over spilt milk but we must learn the lessons of life.

    There are many families out there paying rent who are paying other people's loans. Why not allow them a chance at home ownership. Some of them waste countless years saving trying to build up funds to make a downpayment and all the time home cost keep rising. I recall a time maybe 10 to 15 years ago a nice home was about CI$150K and now today that's a dump or a one bedroom apartment.

    So by the time these poor people have their money saved the cost would have risen. Kind of a like a dog chasing his tail. It's not that they can't pay their bills it's just that they do not have that luxurious excess to save.

    The fact is the goal of every young Caymanian should be to get your own home as quickly in life as you can.

    I am not saying this is the perfect scenario for everyone but for some people it makes sense to do it.

  10. Anonymous says:

    My friends…Pay no attention to the political barking it is a good idea but the comments they make have no basis.

    I need to read the law but this is my take….

    I take my draw and I buy a piece of land raw cash.

    In Cayman, two things equal credit i.e. collateral (Land & Cash and a few other things) this too needs fixing to bring us into a modern times where income or potential income equals collateral but since it doesn'tyet lets work with what we have.

    Now, things are hard and land is being sold less than it vaule (or so some MRCIS report will say) and since that is what the bankers in this country believe then so it be the truth.

    Get a good deal on land and I can turn this into further cash in excess of the $35,000 into lets say $45,000.  I am a good customer at the bank so I will demand that I pay 4% and waive all the fees and it might work or I will go to credit union and borrow at 6% with no fees.

    Next, I take the $45,000 and invest into a series of high dividend yield securities local yielding 7% (you know the one you pay your monthly light bill.  I then hedge this risk by using the high yield securities as collateral for another loan (a student loan).

    You look at the pattern…and see how the money is being "created" and it become easier and easier to walk into the bank and be greeted and proclaimed as a high value customer instead of that young man with the old shoes and the cautious approach who they try to push 11% loans to take a trip to Miami to get some new shoes.

    I'll show you new shoes…compliments of you the customer.

    My pension money is already put at risk and the lack of control means I have a huge timing risk. In fact, the pension law requires 70% invested in equity! Now, that said, as a lot of commentors posted it is not wise to do this rightbefore you retire and you will not be a happy person.  I will be a lot happier knowing that I screwed up 35K then knowing that somebody else did against my will.

    So to me..your regular Caymanian…It won't be a trip to the Benzs dealer and the land purchase is just a tool..you need to own land in this country free and clear, that is the problem.  If you could leverage your pension for a good purpose such as education or business loan it would be a boost but some things are not in life…

    I attribute it to haters and those with lack of vision or just the crabs in the bucket.

    • Anonymous says:

      This Pension Amendment is an excellent idea.

      And people are NOT being forced to take it – its just another option available for Caymanians to own a piece of Land. Why that upsets the PPM i have no idea.

  11. Anonymous says:

    I wonder what this stroke of genius will do to the burgeoning government pensions black hole? $350m and counting…

    • Anonymous says:

      Read Silly!

      This Amendment applies only to the Private Sector – Not Government, so no need to wonder.

       

    • Anonymous says:

      Blackhole…

       

      Don't worry PSPB won't give out a dime…self preservation is the key and they are not subject to it..they have been ask to consider…..

      Here is the consideration process…35k x 1900= 66,500,000 KYD = 1/2-1/3 deposits =fee have to be absorded by the remaining persons and paid from the remaining 1/2-2/3 cash= less budget=less salary=no way…so don't worry yourself it will be a few more years before the screws come loose all at one time and it just popsdown like an old car.

      Private sector= pull while you can because you are subject to the same increase fees based on decreased accounts balances.

      Smart money will pull pension to pay down house and borrow again to funnel money into a different or self directed pension fund who meets their needs.

      Again, the weight to pull will fall on the back of the private sector…

      "Lord forbid the ponzi scheme come to an early end or the wheels of the roulette table stop spinning or the hammer drop on the barrel of the .38 7/8 loaded with bullets"!

       

       

  12. Anonymous says:

    remember the pension holiday????  and what a failure that was….this will end up the same…..

    the average person has more sense than the short sighted politicians….

  13. Anonymous says:

    This is an excellent ideas.

    I am so glad to know that Caymanians will be able to use their Pensions to acquire Land, or a Home in their own country and not merely send it overseas to build bridges and schools in America.

    Pension funds lose money – look at your statement – owning your own home is an asset that will only appreciate.

    • Anonymous says:

      Uhhhmmm…there are plenty of home owners in Florida, Arizona, Nevada and even here in Cayman that would disagree strongly with your real estate thesis.  Good luck with that.  

  14. Anon says:

    I actually think this is a good idea. The pension companies will always squeal when they are told their "guaranteed" funding stream into a pension plan may be disrupted, and will scare you with dire warnings of the long term effects of dipping into the savings plan. Of course they will say this – they are protecting their own interests. The problem with these required-contributory pension schemes is that they have a lot of fees attached to them, many of them hidden, and the investment management is at best, average. Can you really say with any certainty what ALL of the fees are in respect to your pension scheme? (including the fees for each of the underlying funds?).

    On the flip-side, owning real estate, over say a 30 year period is a far better investment than making 30 years of contributions into a pension fund. Right now, investing in real estate is considered a poor choice. It is unfashionable. Many people have gotten burned investing in real estate, but that is often as a result of overstretching themselves when they borrow. The long term market itself is still a good choice. Both a pension scheme and real estate are very long term investments for you and your family, and right now I would much rather have something real, some bricks and mortar, than some greedy insurance bloodsucker charging my pension funds to death.  

    • Anonymous says:

      Subprime Cayman!

      Revisionist History in the making? Or did we just totally IGNORE what happened just now in the US mortgage business? People who couldn't AFFORD mortgages were allowed or even ENCOURAGED through government programmes and private sector greeed to get into long term committments they couldn't afford.

      The basic principle is this: if you don't have the discipline to save a little each month and spend a little less each month, you won't have the discipline to set money aside for annual homeowners insurance or monthly life insurance (both of which the banks require for mortgages). 

      The lack of savings is a red flag that the potential borrower may default on the terms of the mortgage.

      It's part of what happened in the USA. The snowball effect, of course, was accelerated by Wall Street's productizing of high-risk mortgages. That probably won't happen here in Cayman.

      But what CAN happen is a high rate of defaults later on down the road. Which could lead to higher interest rates or bank fees and a glut of foreclosed property which would drive down property values.

      And what happens to these folks when they hit retirement, have got $30k less in their pension fund, and have either lost the home they bought with that $30k or let it fall into disrepair? Or, even worse, faithfully paid their mortgage but are surrounded by home owners who did NOT and now the entire neighborhood has lost value?

      Not trying to be Mr Doom n Gloom. Just Mr See What Happened Up North?!

      • Anon says:

        What happened up north is not what happend in Cayman.

        I think you will find what happened in the USA with the sub-prime mortgage crisis has not happened here in Cayman. Lending standards here in Cayman have never gotten as loose as they once were in the USA. It is those loose standards that got so many people in the USA into trouble. Cayman-based banks have always been very conservative in their lending, and whilst times are not easy, we seem to have missed the worst of the fallout from their poor standards.

        I still maintain that in the long term…and I am talking 30 years, owning real estate is a better bet than investing the same amount with a pensions scheme.

  15. X Pat says:

    That's what you get when amateurs run the show. The concept of pensions is absolutely sound and is to provide an income in retirement. You have to run your other expenditures alongside the pension contributions. That includes savings (for a house deposit) or mortgage payments. Cut your cloth accordingly. Being able to raid your own retirement fund, however popular with some sections of the community,  simply undoes the good that the pensions legislation provides. Doesn't anyone in Cayman look further than a couple of years in their planning?   If you can't afford a house now, you have to wait a while.

  16. Simple days says:

    So could someone tell me exactly what this means… I tried reading the national pension amendment bill but I am not a lawyer.

     

    I am a Caymanian I currently have two loans:-

     

    One loan for land

    One loan on my apartment

     

    I got the land first with the intent to build but in the long run it was cheaper for me to get an apartment for the time… i still entend to build on the land and rent my apartment

     

    My question is

     

    Can I take money from my pension to put towards my loan for the land?

     

    It would allow me to refinance and lower my monthly payment thus putting the difference into my apartment as principle to pay it off quicker…

    • Common Sense says:

      Dear Simple Days,

      You "entend"?

      No, you would NOT qualify for this.  You have two investments/loans already.

    • Anonymous says:

      I don't know how the law will be drafted in Cayman, but here in the States, you are allowed to withdraw from your 401(k) or retirement funds if you qualify as a First Time Home Buyer for your primary residence. 

       

      Among a few other instances, you are also allowed to withdraw from your retirement savings for certain medical expenses, if you become disabled and for college expenses for yourself, your spouse, your children or your grandchildren.

       

      Otherwise, you will get hit with a hefty IRS penalty if you use it for other things, like investment properties, second homes or vacation homes (mostly for what are called "snow birds" that spend the cold winter half of the year in the south and then afterwards return to their primary homes in the north). 

  17. Anonymous says:

    Wonderful idea. Now the Banks will be forced to reduce their interest charges on all the free money they lend out.

  18. Anonymous says:

    WHAT!!!!! Has this Country gone mad?

    Has anyone in Government got any brains or sense?

    How can Government give something that they are not even paying?

    When pension was first started it was Caymanians only contributiions but after a couple of months they decided it could not work as there was not enough cash coming in, then, hey presto, the expats had to pay pension.

    Why do expats have to pay pension at all? Surely this is a statement that you are expected to retire here and draw a pension.

    With less and less ex pats and all the "moonlighting" going on, I have to wonder where this money is coming from?

    If you cannot aford to buy a home, you definately CANNOT afford to maintain and run it!

  19. The lone Haranguer says:

    We are in the future not going to pay the civil servants pension liability, so the smart money will grab the money and run !! Ponzie scam.

  20. mr. t says:

    Ladies & Gents. Don't you get the picture? This is not about helping some poor soul getting a house, because under this scheme should they buy into it, the only thing they will be getting is "in debt". 

    Well you get the picture!! 

    This whole thing is about getting rid of some sixty or seventy odd low cost houses that were built prior to having them sold, so now they are stuck with them and needs to desperately get  them off their hands. As we all know elections are coming up soon, so they can't have unsold houses hanging around! Won't look good.

  21. Anonymous says:

    I have actually no problem with this at all. I find it actually good to have. It puts options on the table for people who manage to pay their bills but can not seem to build any funds for a deposit.

    I look at people who are presently doing the National Home scheme and think this may well replace that.

    I think this also stands a chance of jump starting the economy at least a bit with some construction business.

    I mean I hear you guys heaving and a hoeing but for people who want their own place and can not seem to get it this might just be a way out. And let's be real I wish I had invested in my property my pensions before I lost nearly 50% of it in the last fallout.

    I just look at it as giving people options.

     

  22. Anonymous says:

     

    A step in the right direction to ultimately get rid of the pension law. People should have the right to save t heir money they way they would like too. Why does the government have control of how I save for my retirement, with my money, that I earned myself. To protect myself from over indulging in life and having to be supported by the state at a later date? As we have seen in the recent/current slow depression in some Western countries, some people whom have saved their entire life have had it gone in a short time as the stock markets crashed. What makes us think that can’t/won’t happen in Cayman? Did you think it would happen in Greece?  Then they have the caveat that when you do retire you can only take it back out at a determined rate that satisfies the funds ability to continue making money off our money. We should have the financial freedom to take our money and do with it as we please when we please, like buying a house, sending kids to college, and going on a world vacation before you are too old to enjoy it, whatever. It’s our money. It would be a lot different if it was a security fund held by the government to help people who need it later in life.

    Shouldn’t we have the right to invest in companies that align with our moral values in how they do business,yet we are forced to pay into a fund that other people get to invest our money into what industries/corporations they seem fit, and charge us for it! It would be better served to set up voluntary programs where government and business attract employees with the retirement fund contributions instead of a burden to business with mandatory pension payments, and stealing money from workers pockets in the name of the world financial monopolies?

    Keep up the good work Ralston and strip the pension law any chance you get. 

  23. Anonymous says:

    Why have they not called it a “raid” that expatriate workers can withdraw 100% of their pensions?

    PPM fight against anything that try to help Caymanians.

    • Anonymous says:

      Did you actually read the article, or did you just assume that the PPM were fighting against the proposal?

      "Opposition Leader Alden McLaughlin said that he and his colleagues would NOT vote against the bill as he felt many of the dangers raised when the idea was first proposed in the LA over a year ago in a private member's motion were addressed".

       

  24. Anonymous says:

    Why does Alden fight against everything that gives Caymanians a help up.

  25. Anonymous says:

    Excellent idea!

    Finally a law that helps Caymanians.

  26. Anonymous says:

    This will be Elio's legacy. Hopefully he will be remembered by anyone who opts for this when they are barely surviving off their pension which has been decimated.  Hopefully he'll be there to bail them out.

    • Bail out says:

      We will be bailing out either now or later.  Every Caymanian feels it is their right to own a home, but not to work for it or save for one.

    • The lone Haranguer says:

      At least they will be in thier own house and they will be able to rent a room for income when everybody who was in the scheme that became defunct in the crach of 2020 is renting and starving. property is the best buddy at least you will have control of your money and assets.

  27. Anonymous says:

    I really think they should review the whole pension thing…

    And stop forcing people to pay pension to Investment companies / Pension Companies that is playing around and losing the pensioner's money.

    They should look in to having all Caymanians / Pensioners to put their money in to a bank account or better yet Credit Union that is Governed by Government, that there is no withdrawals allow from this account until the pensioner has reach the retirement age.

    The reason for this… It is better to received what you have put in to your pension fund plus a little percentage back, than to be losing money after bad investments and so on.

    I am sure everyone knows what I am talking about and NO body likes to lose money especially when you have no control over it.

    I whole point of a pension fund is to have money when you retire.

     

  28. Knot S Smart says:

    This is a good idea!

    At the rate the pension funds are losing our money we wont have any when its time to retire anyway.

    It should however also include everybody, including those on work permits.

  29. Anonymous says:

    All of these govt initiatives are reflective of the IQ level of the politicians involved.  It seems that though there are some that are educated, the ones that are not are overwhemling the educated oneswith their stupidity. 

    None of these intitives make sense for the long term.  They are feasible for vote purposes only but it is not for the good of the country in the long term. 

    How do we vote all of these idiots out now and get a whole new set of fresh blood.  Or please voters, only vote for educated individuals who care about Cayman for the long term.  Please stop electing people because you got some flowers mothers day and a washing machine etc.  That is just pure ignorance. 

    This pension borrowing is nonsense and needs to be scrapped.  These same people don't have the money for a home will remain in this position in a few years time needing more money.  Throwing money is a temporary band aid.  Find the real problem and provide a solution to that.  Teach these people to live within their means.  If they had something bad happen, well tighten the belts.  Everyone has had to do it at some point in their lives. 

  30. Anonymous says:

    I'd rather have a decent pension and live in a nice rental house than own my house but hardly have any income. What's the point? Why the obsession with home ownership?

    • Anon says:

      Well….long term…..say over 30 years…..it has generally been proven to be a better investment than "paper" investments in the stock market via a pension fund.

      What further makes a pension fund a poor investment are the levels of fees. There are up front and hidden management fees that sap the value of the paper investment throughout its life. Real estate generally appreciates in value over time. Somestimes slowly, sometimes quickly. Real estate is also a good hedge against inflation (and believe me inflation is coming).

      What is happening now in the real estate market is unusual. Many people borrowed more than they could afford during the period of loose lending standards, and then lost their homes. There are plenty of scare stories about the pain people have gone through, and many no longer consider real estate a "good" investment. The problem with this thinking is that it ignores what has consistently happened in the past in the real estate market. Real estate values have consistently improved over time. Stock markets less so.

  31. Anonymous says:

    If someone can't makepayments on their house today, then for sure they can't make payments next month when their mortgage payments are due.  It's a very stupid idea.  The civil servants shouldn't be allowed to follow suit because then the people there won't be any money left for the people that don't collect their pensions now due to the liability not being paid.  

     

    • Anonymous says:

      If I were a civil servant knowing that my contributions had not been paid. I'd be doing what I could to get that money anyway I could.  Non civil servant's are probably better to leave the money alone. Home ownership isn't everything.

  32. Anonymous says:

    Hold on so when Caymanian fathers were at sea in the old days the young  girls and boys that there mother was raising were doing crime.

    Come on what a pile of BS!! Its all the material things we see on TV and and the high cost of living which has a single parents having to work harder and  what adds to this further is no chance of a properly paying job or even getting a reply when applying for one.

    These politicians are just pulling at straws and really have no solid and sensible plan to get through these economic woes which is failing the entire world. What is this going to do? make people commit to a mortgage and then what if the economy does not recover in 2-3 years? Then what? So the government can make a quick fix on cash on land sales and import duties to make there budget look good and then what ? Do you think this is a solution to our crime and unemployment? 

  33. TennisAce says:

    I am quite upset at this as I am of the view that this amendment should also have included expatriates as well as  Caymananians.  There are a lot of expats on this Island who are here working, who have reached ages of 45 and upwards and who can only watch as their pension fund diminishes each and every time they get a statement from their Fund managers. 

    Why should Caymanians be the only ones who benefit from this amendment to the Law.  I think expats should also be given the option of deducting a portion of their pension funds either to invest in property back home or to actually invest it elsewhere.  The same requirements would apply.  In addition, since there is this concerted move on to have more people remain on the Island, how about those people who were subject to rollover, and who have now been given a reprieve be given the option of also using some of their pension funds to purchase property on Island which would aid them in meeting some of the PR requirements, which is to own property on the Island. 

    Not all of us are here as transients and some of us do wish to remain on this Island, own property and continuing to be a part of the community.  This amendment to the Pensions Law would have been a great opportunity for those who are interested in continuing to be a part of the Cayman community to do so. 

    • Anonymous says:

      If this is such a good idea for Caymanian employees then why not for all Civil Servants and expats?

      MLA Elio why are you discriminating?

      Shame on you MLA Elio.

  34. Anonymous says:

    I have no strong views on this either way.  But  CNS – You're certainly learning to stir up controversy and debate with your headlines though. Well done.

  35. Anonymous says:

    It would be alot better if the Pension System was dismantled and everyone get back the money contributed.

    I have lost alot for the last four years and continues to lose. So sad.

    By the time I am to retire I will not have enough to buy me a dozen Dunkin Donuts and coffee.

    By then those involved with investing my pension money will be long gone and living a life of luxury some where else.

    The Pension Plan and the laws weren't put together properly and this is why the Polictians are now trying to put a small bandaid on a very large wound. It will not work.

     

     

     

  36. Anonymous says:

    Unfortunately this will be good for a handful of people.

    I don't have a mortgage thank God I have worked extremely hard made and many sacrifices to have this done and it would not help me.  I would have liked to see included is people like myself be able to take the money the same way and do necessary repairs or renovate that they otherwise wouldn't be able to afford.

    I  don't have many more years in the work force considering my employer retires staff at 60.

    The Pension companies should be required to invest a certain amount of each Pension contributor's money locally. I very interested in knowing if the Ministry responsible for the Pensions do some type of audit on the companies.

    When a person reach 50 years of age all of their contributions should be put in an interesting bearing account or a fixed deposit and not used until their retirement age. It should be them released to them the full amount.

    Expatriates that leave the islands should be taking their funds with them not having to wait. These funds are invested I believe on a monthly basis. The requirement to get the full amount of the funds held at the present value (time of resignation) should be a months notice. Just not a good feeling to leave behind what you have worked hard for, so someone can do as they want with it.

    How are people that can't pay their mortgage, on the path to losing their home and if they having that amount in the pension going to be expected to pay it back when they are already struggling? Sounds like alot of crap to me.

     

     

     

     

  37. Anonymous says:

    You may need another Mercedes dealer to handle the demand…

  38. Anonymous says:

    I have never heard of such utter crap!

    Who is going to keep these folks when they reach pensionable age???

    Who is going to pay their morgage??

    • Anonymous says:

      "Who is going to keep these folks when they reach pensionable age???"

      Your Grandchildren will curse you while they pay taxes for Social Service payments to the elderly who have no funds – caused by the UDP pension mistakes.

  39. Realtor says:

     

     

     

    This approach to the housing problem was very loose thinking, the mortgage repayment period and the high interest rate is were the attention should have been focused, not the deposit. 

    If two percent of the monthly pension receipts were put in a mortgage fund, with a cap at say forty million. The proceeds were then administered by a local lending institution, with proper guide lines, among them a set interest rate of say 5% and 30 year term, no finders fee, no commitment fee. The result would be an affordable home at half or less of todays monthly cost to buy and pay for home.

    A $150,000.00 thirty year mortgage at five percent is $805.00 per month, should the repayment be biweekly at $402.62 it would reduce the mortgage term by five years to 25 years and save the mortgagee upwards of $25,000.00 in interest. 

     

    This is a far better solution to taking pension funds up front and loosing the effect of compounding of the investment, and the hope of capital appreciation is alive still, we hope.

  40. Anonymous says:

    Some people WILL think it is a terrible idea because they do not want Caymanians to own a home or property.

    Caymanians please take your draw. buy property or homes and do not be discouraged by comments.  Because you need to sit and think that some people do not want you to own anything, they want you to continue renting their apartments.  Take my advice ………….take a draw and buy a piece of land, even if you have to put a hammock between two trees it is yours.  Build a fowl coop on it and enjoy your life.   Too many outsiders are buying up Caymanian property.  Caymanians this is the time to help your children get something, even if it is no bigger than a cartoon box.

    • Anonymous says:

      The worrying thing is that there are actually some people foolish enough to think this is true!

      Get a grip people, spending you pension now means you will be working longer and harder. Too many selfish idiots will draw their pensions early, find a way to bend the rules and spend it on the usual bling, then in 20 years the decent hardworking people will be payingfor their upkeep.

       

  41. Anonymous says:

    This is a terrible idea.

    • Anonymous says:

      I do not know what the UDP government is up to, what have they been smoking? This will be proven to be a very disasterous idea in time. I suspect it is simply another ploy by them looking for support (& votes in the next election)

      • Anonymous says:

        I thought that I was the only one who saw their intended trick?

        You made my day.

    • Anonymous says:

      its an elio idea!

  42. Anonymous says:

    For an educated man, Rolston can sound like a real ass. It is not poor HOUSING conditions creating our criminals, it is dreadful or non existent HOME/FAMILY/FATHER FIGURE etc conditions.

  43. Loopy Lou says:

    Discriminating in this way against PR holders is illegal and will expose CIG to a significant contingent risk.

  44. Never been a better time to BUY! says:

    2 bed 2 bath for sale.

    Link me for a great price!

    • Loopy Lou says:

      I'll offer you half of what it was valued at in 2007.  Good deal if you ask me. 

  45. AnonymousSick and Tired of the B...S... says:

    Has anyone in Government studied the maths, and the hidden side effects, which might result from their “pension raiding” proposal. Absent very substantial supplementary contributions to an individual’s pension account, and on the basis of 10 per cent contributions, against a statutory maximum salary of of $60,000 per annum, it would take about six years to reach the $35,000 available funds which can be applied against, or towards, a mortgage – this on the basis that the value of the underlying investments in their pension funds had not actually dropped below the amount of their contributions in consequence of Stock Market fluctuations. It would seem to exclude those most needful applicants – young Caymanians. In addition, the requirement that any subsequent sale of the property to which this “transaction” would apply, would require repayment of the effective “loan”, it would mean that any participant was effectively locked in to the property they had initially bought, unless subsequently their financial circumstances allowed them to no longer rely on this source. In other words, it would be likely that they could never progress up the property ladder. All of this ignores any question of the impact on their future need for a source of income, IN RETIREMENT. The whole proposal smacks of “jam today” ………….

    • Anonymous says:

      Sick and Tired this is Elio's project but the idea came from some Sri Lankan developer who heard about Singapore's similar pension plan! Naturally every idea these UDP members of parliament hear about is "a good business idea for Cayman". I believe anyone that has enough money in his pension to use as a deposit on a house, already owns a house. What Elio should be proposing, is that the government build 100 houses a year for poor families and give them away, shut down the NHDT and just build houses to give away.

    • Anonymous says:

      16:04: "Jam today" is the Caymanian way, alas, when you have …….erm….intellects like Elio and Rolston in the House.

    • Anonymous1*(:0:)1* says:

      This is so immature of the government to not look into this legally before passing it. In this case how soon will the pensioner have before they start to repay this loan. Will they have a repayment plan on how much they will pay back into this fund, if its done right they should be paying back into the fund right away, as they have taken out of their retirement fund but still have to make payments to it.

      If you take out $35.000  what is the re-payment on that amount and do they still make their regular contributations, otherwise this is all a scam. Poor people, the pied piper plays again.