Compliance pension law focus

| 29/05/2012

broken-nest-egg.jpg(CNS): Ensuring that employers comply with the pensions law is one of the major focuses of new legislation dealing with private sector workers’ pensions. The first major re-drafting of the law since it was passed in the 1990s, the minister for employment revealed the proposed bill on Monday and asked for public participation. The law also provides for the split of oversight between CIMA, which will now regulate the pension funds, and the new Department of Labour and Pensions, which will ensure employer compliance. The law does away with the National Pensions Board and introduces a fixed penalty regime and direct consequences for employers who fail to follow the law.

Officials also said that the new law provides greater transparency for employees, or members of the pension funds, and requires funds to issue quarterly statements as well as host annual meetings for workers to question and probe those responsible for managing their retirement money. It also obligates funds to tell employees, and not just the labour department, when employers are delinquent with contributions and will also require employers to keep pension records for seven years on every employee.

The ministry has launched a comprehensive survey which provides for comments on the main areas of the bill. Over the next month oficials will engage  in a wide consultation of the law before it is brought to parliament for debate. Speaking at a press briefing on Monday, Minister Rolston Anglin said he believed the bill "was going to go a long way to creating a culture of compliance and to make sure workers' money is protected.”

With hundreds of non-compliant cases, the minister said it was clear that the previous regime was not working and improvements were needed. “When we have a situation with 600 cases in a backlog of non-compliant employers, we knew we had to act and we needed to act in a way that was reasonable. Government must take a leading role in ensuring Caymanians are better prepared for their retirement after a lifetime of hard work,” Anglin said,

He added that the United Democratic Party had campaigned on a commitment to examine and revise work related matters and there was nothing that strikes more to the core of work than pensions. “After a long career, if our people can't retire with dignity then they will ask what the life-long hard work was for,” he added.

Anglin said the new law would enhance pension protection and the plans themselves, as well as introduce an improved regime of regulation and transparency. But above all, he said, it was about developing a culture of compliance among employers and employees.

Explaining the decision to split the regulation of the plans themselves from the compliance of the employers as well as the elimination of the National Pensions Board, Anglin said that CIMA was already resourced to oversee and regulate pensions as it could be absorbed into the department that currently regulates insurance.

The minister said it would have been a costly exercise to create an internal regulator for the funds themselves inside the labour department. With the department now focused on compliance and enforcement, it will be issuing the fixed penalties and ensuring that businesses that are not compliant do not receive a Trade and Business license, which would in turn prevent them from getting work permits.

Those employers who dispute their fixed penalties will need to challenge the fine in the court and employees who believe their bosses are not compliant can complain directly to the labour department.

The minister explained that this is all an administrative function and there is no longer a need for a politically appointed board to deal with the country’s workforce pension regime. He pointed out that there are no other circumstances where a board manages a government department but that the role of boards was confined to government companies or statutory authorities.

Anglin also revealed that the normal retirement age is moving to 65, which will mean employers will be required to continue paying into their worker’s pension funds until that age. But, the minister said, there would be a three year transition period to allow people who are nearing 60 to still allow them to end their careers at that point if they wish.

Go to government survey and details of the legislative changes here

See draft legislation and notes on the law here

Check back to CNS on more stories regarding private sector pensions this week.

Category: Local News

Comments (44)

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  1. The Truth is Out There says:

    Why not raise the maximum pensionable earnings or at least index it with the cost of living going forward?  It was set at CI$60,000 and has never been changed.  Some employers make pension payments on the entire salary and some stop as soon as they reach the CI$60,000 limit.  

    • anonymous says:

      Let us observe if this is pure political rhetoric and grandstanding or not. There are already multiple laws on the books that the government do not have the guts to enforce for fear of upsetting their political business supporters and big corporations with deep pockets.
      Passing new laws to join the list of unenforced laws is not the answer. Action against those employers in  violation would be the only way to convince the people that government is serious this time around.
      A government that passes laws with no enforcement of those same laws is only politically grandstanding to buy time off voters in hope of hoodwinking them during election season one more time !
      Prove me wrong.

  2. Anonymous says:

    Unduly complicated, and difficult to manage. The ticket system is good, but why not cut non compliant employers off from work permits? It would be a cheap, easy and highly effective means of enforcement.

    • Truth says:

      Total lack of control and responsibility.  CIG.

      • Anonymous says:

        Anon 09;05

        The only lack of control and responsibility  on CIG part, is the faileur to protect it's small businesses. This is what true Government does.

        I will tell you all today, this manatory savings, will not work . Many states in the USA has shut down their scheems, thereare no money to put towards a savings anymore. 

        They did not put in place, crucifying laws against their people either.  

        This should have been left alone, all our white color companies provided retirement packages for their  people, when they came to our shores to opperate. C&W the Banks,Insurance companies, law firms, accountant firms. These companies have the authority to set their own profits, unlke the small businesses that are opperating on an un-level playing field, due to not being  regulated.  

        Government should never had let these money managers corn cob them into this ponzi scheme.

        I take my hat off to Ellio Solomon for having such foresight for his people. He gave them the opportuniy to invest in one of the most lucrative investment in the world…real estate. By the time these people get to retirement age, their property will quadruple, which means they can sell off that big house, buy a small unit some where and live off the large profit. Very good move Ellio!

    • Anonymous says:

      Anon 21:53

      Go ahead and cut the 1500 none compliance businesses, out of obtaining work permits.

      "Cheap and easy effective means of enforcement……  really!

      Go ahead and put those 1500 businesses out on the street. you think you have seen crime in this country… go ahead!           

      I dont know who you are or whether you own a small business or not. You do sound like you are on the monetary receiving end of this deal.

      What the Government has done to the small business in this country is illegal, and inhuman. they are forcing businesses… by law to provide a savings for expat workers.

      Before this mandatory savings came into law, we were doing ok with our business. now we can not pay our bills.

      Put us out of business, some will go on wellfare and some will be coming to you for food money.

      • Anonymous says:

        You are competing with businesses which follow the Law. You do not deserve to do so.

        • Anonymous says:

          Anon 20:55

          The construction businesses compete with no one following the law. There are no jobs. There are over 700 construction businesses which are scraping to keep from getting their utilities cut off, and put food on their  tables.

          What  do you think they will take care of first..feed their children or forced to put away savings for their expat workers? you tell me!….you are the smart one!

          Should we all shut dowm and collect wellfare?  The major  problem is, the governments of today and yesterday refused to curtail the selling of trade and business licenses to public servants , bankers, insurance agents, mothers and grand mothers.

          No regulations or laws  are in place to regulate this industry…. like the white colour workers have.

          And dont give me that bull shit about free enterprize…you cant go anywhere else in the world and buy a license to carry on construction business without some sort of qualification

          • Anonymous says:

            And at last 100 of those construction businesses are complying with the pensions law. They are the ones that deserve to succeed. The rest should pay up or close down. If they cannot pay they are legally bankrupt. If they are will not pay they are morally bankrupt. The 100 will take up the slack both of work and employees.

            • Anonymous says:

              to 05;03

              It's obvious you are on the receiving end of that money, or you are one of the few that are doing well. My hat goes off to you, my man!

              So, you think that 600 of us should shut down, and let 100 of you succeed. You are so selfish it's unreal.

              What is it you dont  understand, when we say, there are not enough work going  around for us to pay our bills…, our employees, and on the back of it, save money for them.

              Let me say this, before 1998 all small businesses were doing great, along with their employees. we were all happy with the arrangments then.

              This crap started with the  hotel workers, being pushed out of their long term employement, at the two large hotels being sold around that time.

              The government should have had enough balls to deal with those  isolated issues, and not drag the construction industary into this mess. 

  3. Anonymous says:

    The Minister says people should be able to retire with dignity after a lifetime of work, or they will ask what was all the hard work for?…Agreed!

    However that is NOT the case for most….and Social Services exponential increase with helping those who find they cannot pay their bills…due in large part to the cost of living increasing much more than most salaries/pensions.

    But also due in large part because those hired by Govt. after Jan 2000 (Defined Contribution Plan) cannot "retire with dignity". While those whom are part of the Defined Benifit Pension Plan (and Legislative/Political) Plan retire with much, much more lavish pensions.

    Guess which Plan the architects of the Defined Contribution Plan are a part of?

    Yep!…Theyvoted themselves the much, much more lavish Plan…

    To make matters worse the Pensions are so underfunded (mainly numbers on papers or computers….but little actual cash) that no true "Investments" can be done to "grow" the money. And so each year Govt. pays out benifits from the Annual Budget….which means each year more and more needs to be budgeted for Pensions.

    A vicious cycle of make beleive economics.

    • Anonymous says:

      Why are you the only one to see the looming disaster for us Civil Servants employed after 2000?

      It is a shame how the leadership of the Civil Service Association, who are all on the Public Service Defined Benefit Pension Plan, did not and have not warned us Civil Servants joining since 2000 that our pension is only going to be about 25% of our salary while they will get their 60% of salary plus other benefits.

      Us younger Civil Servants need to stick together because the older Civil Servants are only looking out for themselves and do not care how we will be affected with hardly any money on which to retire.

      SHAME, SHAME on you older Civil Servants for only looking out for yourselves.

      • Anonymous says:

        Yes it truly is a shame.

        I joined after 2000 and no one explained this looming mess. I found out recently when enquiring to the Pensions Office and almost passed out when i heard the numbers provided by PSPB. People on "Poor Relief" and "Seamans Pensions" are collecting more than i (or most Civil Servants) will collect "Retire On" after 15+ years of service.

        Nothing against Seamen or those on poor relief….but some seamen went to sea less than 5 years….and some on poor relief have hardly ever worked (sometimes because they will NOT do certain jobs ar applied themselves sufficiently).

        While i (and many others) work dilligently every day and are left to retire "in Cayman" with approximately 25% of salary….how is this fair?….It's NOT! Especially as no one in the Civil Service is educating anyone of this looming disaster!

        I've spoken to many Civil Servants who have NO IDEA!…most beleive they are on a plan very similar, to or the same as, Defined Benifit.

        Meanwhile the "Powers that be" are "Living Large and in Charge"!…Some collecting both Inflated Salaries AND Lavish Pensions….and these same Pirates are making the rules.

        One of these Pirates likes the phrase "Keep um dumb n unda yeh tumb"

  4. Anon says:

    Oh yeah!

    Another board!

    Hope they are all getting payed 100k a year! Sorry, what was I thinking…that’s way too low, they deserve at least twice that. Triple if they also can draw their pension whilst working.

    This is so much smarter then putting that money towards something useful!

    Ooh, and let’s penalize employers on the brink of bankruptcy even more! Surely we can come up with another new fee if we really put our thinker caps on.

    Maybe we can charge them for breathing.

    Put them all out of business I sat, they are no good anyway, and we don’t need them!

    Maybe we can make a new public holiday to celebrate!

  5. The lone haranguer rides again! says:

    Stop making employers criminals, let people take care of they own pension and health care. The Goverment should not be involved in this let the private sector sell employees health and pension plans.

    If people do not wish to sign up that is their business. The nanny state is failing all over the world, Cayman became great because of light regulation and no taxation, let’s get back there.

    • Anonymous says:

      You are absolutely right.

      Let only the strong ones survive. The poor can die from hunger.

      A typical selfish remark that fits an americanized society.

      Me me and only me.

    • Anonymous says:

      Your model will only result in direct taxation to pay for a much more advanced social services infrastructure. Our existing pension and health models are excellent compared to that alternative.

      • Anonymous says:

        To anon 06:01

        I say bull shit! you got to be on the money receiving end of this saving.

    • Anonymous says:

      Before the health insurance law and the pension law I was doing just fine.  I knew I either had to buy health insurance for myself (and I was an employee) or risk the costs of medical care.  I knew if I wanted to retire some day I would have to save for that retirement which I have been doing all along.  I am in a private sector pension by force not by choice and if you think for one minute I am relying on that plan for my retirement you need to come talk to me about buying a bridge to the Brac because I do it only because I am forced to and I watch these pension fund managers (in the private sector) making huge salaries, investing MY money in ways I would never invest and then try and give me a report at their AGM to tell me things are difficult and your pension will turn around (they have been saying that since the beginning by the way even during a boom economy period).  In the entire history of any country pension schemes have never been successful over the long haul because they are based on others managing your money and being given a free hand to in essence do legalized gambling and charge you for it.  Now our oh so trustworthy Government comes forward and says "huh, this aint working people cuz we uhm can't really get ahem a grip on it tra la tra la tra la and so we have a new idea to get it solved because well actually you have been being ripped off but don't worry we will fix it for you", sigh…..yup and I will continue to consider that money as money lost and save for my retirement another way.

  6. Libertarian says:

    The pension plan sounds good, but the fact that people are not given their God-given freedom to opt-out of the program, is really taking another person's money (theft) and telling them what they MUST do with it (robbery)!  No matter how good the compulsory retirement plan may appear, the fact that politicians make themselves better at saving money, is too good to be true. Government has already passed a bill to allow Caymanians to raid their own pension in order to buy a home or pay off a mortgage. Government has already declared a pension holiday in order to justify the burden on employers due to the recession, and the hikes on work permit fees for employees. What worries me more than anything else, is not just the double-dipping, but the solemn fact that government may just choose to appropriate the said funds for their own agendas. It has happened before. In the United States government, only portions of funds are being paid to retirees as their social security payouts, whilst monies is being spent on various things. I hate to say, but it's almost like a ponzi scheme. Give people options and allow them to choose their own pension and retirement plans!

  7. Anonymous says:

    Monetary rewards should be given to informants and back-pay of pension recognised.  I know of a person who has not received pension contributions from his employer in over eight years.  Owning ten businesses on the island this is a big shame and should be remedied.

     

  8. Anonymous says:

    I quote, " requires funds to issue quarterly statements".  So does this apply to CIG?  I seem to only get one if they feel like it, and even that appears to be random, just at "somepoint" during the year and ONLY yearly.

    • Anonymous says:

      CIG does not like to eat its own dog food. Just look at the way CIG hires expats. They use "government contracts" to side-step the costly and inefficient work permit monster.

  9. Anonymous says:

    Strict enforcement will cause more unemployment for working class Caymanians.

     

    Why?

     

    It will be another incentive to hire working class expats. Working class expats will not complain when pension and health care benefits are not paid because they fear deportation on very short notice (see Barlow's historical comments regarding the "immigration monster").

     

    Perhaps the answer lies in making work permit fees more expensive than combined pension and health care costs for all classes of work permits.

     

    Of course, this will be resisted by the unethical employers who consistently abuse the expat working class and refuse to hire the Caymanian working class whom they cannot abuse so easily.

    • Anonymous says:

      I pay my employees pension and insurance plus I must pay more for my permit?  That's ridiculous.  Why should I be penalized for those that don't follow the rules?  It really annoys me that there are expats that get Caymanians to take out permits for them so they can stay in the country and look work.  The expat pay for their own permits and don't have insurance or pension. The expats won't say anything because they fear being sent home.  Maybe, we need to move away from work permits tied to employers and have something like the US like a right to work for a number of years in the country and then the expat can go home or renew the time.

      • Anonymous says:

        The point about raising permit fees was made to give employers incentive to hire Caymanians. If no Caymanian can do the work, then there is incentive to train and educate Caymanians so that they can step into the jobs.

        • Anonymous says:

          Well its looks like in reality its not that simple, because this 'incentive' certainly has not worked.

          • Anonymous says:

            The incentive has not worked because the work permit fees are far too low.

            • Anonymous says:

              Really, you are seriously saying work permit fees are too low? okay let’s look at a couple of jobs, got the Immigration fee schedule right in front of me. A food and beverage server costs CI 1,500 per year and you are telling me there are Caymanians breaking down doors and standing in line to wait tables. A dive instructor is CI 2,000 per year and you are telling me that there are Caymanians breaking down the dive shop doors saying ” oh hire me hire me I want to work out on boats taking tourists diving and work weekends public holidays and nights” a sales agent CI 5,000 per year and in reading the ads these positions are usually commission based as they are in any country (and yes I am Caymanian inserts eye roll waiting for the assumptions to the contrary) and these positions also have unfriendly hours, huh and those fees are too low???? Clearly you do not work in the private sector nor a business owner or are simply just ready to jump on the band wagon of no ex-pats which hey why not go that route that will shut down most private sector companies and reduce the population by over 20,000 work permit holders then account for those with families, and problem solved NO NEED FOR GOVERNMENT WORKERS! That works for me as I’m sure tired of supporting their pension, medical and every other benefit they get and entitlement. How about just one time a government worker says thank you to private sector and the public for paying for their living?

            • three monkeys says:

              Why not just say no to work permits and kick all those hard working expats out.  Only then can Caymanians finally prove to the world that they can take care of themselves.

              Or not.

              Ask Bush to do it for you.

      • Anonymous says:

        EXACTLY!!  I think it's the voice of those in compliance that counts…and their disgust with those getting away with it that can make a difference.  Are the people that are opposed to stricter compliance just trying to avoid compliance and justify their actions?

  10. Outraged says:

    What are you doing to resolve all of the outstanding complaints?  I filed a complaint three years ago, the Superintendent concluded there were two compliance violations, and the employee and employer continue to find loopholes to avoid compliance.  Those small businesses that are in compliance would be shocked to know the employers that are not in compliance.  Even further, they would be shocked at the cover-up that continues as this complaint has been reported to at least three MLA's, the NPB, the OCC, and the FOI.  For greater transparency…release the names of all employers and employees who are not in compliance!!

     

    • Anonymous says:

      You are asking for at least 1,500 businesses not in compliance.

      • Anonymous says:

        If employers were held accountable there might not be such a huge problem with compliance…so let's start naming names.  Do you want to be employed by someone not in compliance?  Do you want to give your business to someone that is not in compliance?  Why should your business be in compliance when there are so many that aren't?  These are your choices, but you deserve to make informed choices?

        • Anonymous says:

          Loads of people give their business to employers not in compliance because they are cheaper.

        • Libertarian says:

          "Naming names" will be an attempt to humiliate…. rather provide incentives to businesses, and give them the autonomy they need to manage their own affairs – less fees and regulations. Since when has government became an expert in saving and managing an individuals personal affairs?

          • Anonymous says:

            One can only be humiliated if they have a conscience – I doubt very much that an employer stealing his employees pension money has one.

        • Anonymous says:

          You'd be surprised at some of the high-ranking and well-respected people here – heads of associations and the like, who don't pay health insurance and/or pension to their employees.  Perhaps we should have something similar to the anonymouse tip line for crimes, so that employees and those in the know can report such unscrupulous employers, and obtain a reward if the information they provide proves to be accurate and/or leads to a prosecution.

  11. Anonymous says:

    This is all well and good, but you can make all the laws you want but if you dont enforce them they are not worth the paper they are written on.

    When an employer deducts money from your wages for pension then does not pay that money nor his share to the pension company then he is stealing and this should be dealt with as the offence it is.

    We report it to the pension company and the pension board and they say they are aware of it, but nothing is done.

    So until you start following up on reports made then your laws are worthless.

  12. Truth Hurts says:

    Maybe the goverment needs to focus firstly on its own pension plan and all of the issues regarding that?

  13. Anonymous says:

    How do you plan to resolve the outstanding complaints?  I've had an outstanding complaint for three years…and the employee and employer keep finding loopholes to avoid compliance.  The employers that are in compliance should be aware of those who are not in compliance…they would be outraged to learn what businesses are getting away with non-compliance.  Further would be the outrage of the cover-up that exists regarding my outstanding complaint since it has been reported to at least three MLA's, the NPB, the OCC and the FOI…and is still unresolved!!

    • Libertarian says:

      You always have the option of finding another job that suits you. For the government to effectively police all the businesses on this island may just cause many of them to leave. Think of the implications.

      • Anonymous says:

        If they are not in compliance and violating laws…they should leave! Why would you want to encourage businesses to get away with not following the laws…sounds like more cover up!

      • Anonymous says:

        Seriously…do you want businesses on the island that do not comply with the laws?  The problem is enforcement and not allowing a cover-up for those not in compliance just because of which politician they might know.