Still no pension convictions

| 05/12/2013

(CNS): Although the authorities at the Department of Labour and Pensions (DLP) are investigating over 600 cases of pension violations by employers, which were initiated following a report on the matter by the Office of the Complaints Commissioner (OCC) three years ago, not a single conviction has been recorded. The 2010 report revealed the shocking delinquency and failure of the authorities to enforce the law, but according to information released by both the DLP and the Office of the Director of Public Prosecutions (DPP) following requests made by CNS, just four new case files from those 600+ delinquent bosses were passed to the prosecutor’s office, three of which saw charges laid and a fourth given to the DPP in October is currently pending.

The shocking state of pension delinquency is further illustrated by the fact that the rest of the cases currently before the courts were opened and passed to the DPP more than three years ago. However, so far not one case has resulted in a successful prosecution as the cases, which are all being handled by the Summary Court, continue to be adjourned.

The Department of Labour and Pensions revealed that since Complaints Commissioner Nicola Williams published her report, in which she suggested that millions of dollars were missing from pension funds as a result of employers breaking the law and the authorities failing to enforce it, they had opened 1,419 new cases and resolved 805, leaving 614 cases under investigation. With only four having being passed to legal department, the pensions department is dealing with 610 delinquent employers. 

Although they began naming and shaming the culprits by publishing on their website those being prosecuted for failing to make employee pension contributions, many of the companies listed continue to trade and hold work permits for employees.  

Employment Minister Tara Rivers has promised to address the issue and in a statement released in October following damning criticisms of the situation in an updated OCC report, she said her ministry was reviewing the National Pensions Bill, which was tabled in the Legislative Assembly but then withdrawn by the previous UDP administration.

Some two months ago, Rivers said she was “seeking guidance as to the policy considerations and amendments that need to be made to the Bill in order for me to bring it back to Cabinet”, and said the bill was not in keeping with the policy direction of the current government.

The minister also stated that the Department of Labour and Pensions was looking to increase its staff complement to ensure its effectiveness.

"The department has managed to secure funding for an additional senior pensions officer in the 2013/14 budget and will be making steps to recruit to this post," she said. 

The minister has also promised a pro-active employers inspections regime, which will include pension inspections by January 2014.

Category: Crime

Comments (46)

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  1. Anonymous says:

    The government does not want to enforce this law. Too many close relatives and cronies are running deliquent companies.

     

    If the working class wants justice they must unionize and bargain from a position of stregnth.

     

    The enemy of the Caymanian working class is the Caymanian ruling class.

    • Foreign Devil says:

      The working class which includes the 7000 civil servants and the 9000 people collecting social security better shut up and leave the ruling class (business people) alone so that they can continue to make money and pay all the fees and duties they are living of off!

  2. Dreadlock Holmes says:

    It's elementary. With so many employers in default the consensus must have been from the very beginning that the NPL was a joke, or at the least optional for employers while it remained mandatory for employees.  It must have also have been assumed by many employers that because of typical government incompetence violations of the NPL would never be pursued. This has turned out to be the case. What further complicates enforcement of the NPL is the itinerant workforce on the island and the ability of employers to ‘disappear them‘ before they find out there is no money in their pension accounts. The entire system of the NPL is dysfunctional, and it would be best to leave it for the employees to be able to decide on their own where to deposit their pension which could still be mandatory. Then, the employees could mnage their own accounts and examine them periodically to see if the employer had met their obligation! It is painfully obvious employees' pensions are more important to them than they are to their employers. This would turn the tables AND free up time for those responsible now for enforcement.  To be able to sit on their hands more.

  3. Anonymous says:

    The only thing DLP worried about is construction workers not wearing a hard hat or a bright orange vest. While this is important…….. they should also spend an equal amount of time dealing with other short comings in the workplace.

  4. Anonymous says:

    All this and that about pension!!! What about the companies that won't insured their workers??   My daughter has been working now over 2 years for a wanna be west bay politician and SHE DOES NOT HAVE INSURANCE – but she got Pension coming out of her pay every week.  All i can say is if my daughter gets hurt you all will know who this wanna be politician is cause i am going to name and shame!! And what a blow that going to be for him!!

     

     

     

    • Anonymous says:

      Please do it. Talk is cheap.

    • Anonymous says:

      10;41 she should take out her own insurance. This is the reason we should all be paying a social security and health tax.

      This way the payment would be deducted from her salary and paid and managed by our government and not fatten up the private insurance companies.

    • Anonymous says:

      This wanna be politician is just following in the footsteps of real politicians who don't pay health insurance, retirement benefits, or even for the worker's permit.

  5. West Baya says:

    Yep lets kill all the companies,

    Oh yeh, let's hammer all those companies right out of business, let unemployement rise even higher, bring the economy to its  knees….. And we'll be in great shape then… All I hear is people accusing employers of stealing people's pension. And am not saying in some cases this not true. But  let's look at some facts here.  When the CI Government in 2010 could not figure out how to cut it's cost they decided the best way forward was to raid the profits from the private sector, the government it's self can't afford to pay its own pension and hence have to borrow money to try and service its delinquent pension debt. How ironic is it that?  the enforcer of this silly policy are breaking the law even greater then any private sector company, but yet they feel the need to penalize those companies.  Just have a look at the recent news whereby  states like Detroit, Chicago, counters like Marraco, Spain and England, and multi billion dallor corporations are all in serious debt with their pension schemes and are now looking at ways to write off those debts.  A lesson should be learned here, if theses great states, counters and companies can't seem to manage the scheme, do you really think that Cayman will be able to pull some magic wond out its backside and make it work? I think not. 

    Pension should be optional, a courtesy or a benefit offered by the employer, it should not be shoved down the companies throats especially when the government continually increases and introduces new fees just to balance its budge.  Do you really think all these companies are stealing people money? No, instead the harsh reality is they just can't afford it,  the reality is that would have to close their doors, make no mistake many of these companies have Caymanian many Caymanins hired. Will the economy be better off  without these companies.  Don't fool yourselves in thinking that we would.

    Lets look at a few other facts and options; since we now have immigration reformed and PR is much more difficult to achieve, with the perception that only the wealthy will fair well in achieving it.  Why not look at a few changes that could be made to the pension scheme that could help reduce csot to those companies and offer them a away forward to paying off their pension delinquencies;  

    a) Why not remove the mandatory policy for companies having to contribute pension for permit holders.

    b). Why not make it optional for companies to offer pension to Caymanians as a corperate benefit an icentative to attract the best people.

    c) why not make the permit holders effect pension immediately and contribute so in case some day they become Caymanian. 

    d)  why not change the way pension is invested and stop sending the people's money overseas so the boys in the billionaires boys club can stop gambling with that money.  

    e) why not remove the cap of $250.00 as it realates to persons earning 60k and over anually and make it a 5% of total earnings. 

    f) why don't government develope a policy to invest pension in local infrastrure, such as ports, buildings,  schools, eduction, roads, (this way this becomes a new stream of revenue indefinitely without really introducing tax. This could benefit the government and the economy)  I for one would much rather know that if my pension was lost that at least I could can see it in a building or a road, opposed to some dude sitting on a yacth off California sipping a drink and having a great big laugh about how much fun he has. 

    g) government could offer a competitive return equilant to what they pay at any local bank or even a fixed return is attractive in comparison to what anyone is currently earning.  This would mean free money for government n a fixed return for people.  And if the employers contribute then the beneficiary of the fund automatically earns 5%

    I'd bet if we looked at the country's national salary and calculated 5-10% of that it would be in the millions earned each month……. By offering a fixed return this would essentially be the cheapest money government could ever borrow.  Facts are: the number of persons entering the work pool each year is always greater then those existing, this means each year the revenues should increase and payout is always staged oppose to huge lump sums. 

     

    Adminstrators will argue and use their scare tactics that this is bad idea but of course they're only looking out for themselves.  I agree that this may affect few persons working as administrators but I prefer to look at the greater good. 

     Make no mistake, these so call local  pension administrators don't have the slitest idea how and whereyour pension money is being invested. Just review your statement and you'll see your losses. Of course they love to use their scare tactics and state if all don't contribute it will drag the rest down…..  I think that's a total bunch of hog wash…. for example a company that has 30 employees and say that company only contributed for 50 % of its staff, why would that drag the rest down?  What if that company only had 15 employees then what you're saying is the smaller the group the less the return?  So what if Cayman's population was half it's size but all contributed? Would the scheme still be worthless?  The reality is they don't have a clue why your money is being lossed and uses that explation as a convenient excuse. 

     

    Let me be abbondantly clear I advocate doing away with the pension scheme, people need to be responsible for their owen lives and investments, these kind of policies only drive depencies.  And in my opion the real  thives are those accepting, investing and loosing your money and those employers who are deliberately not paying.  But the real mistake is having the pension policy structured the way it is. 

    Again just my 2 cents,  pension never worked the way it's been managed and never will. 

     

     

    • Anonymous says:

      Seems to me like you want the companies to operate as they feel.

      Companies might investigate the idea of having alternative options listed in the staff contract.

      The big problem comes when emplyees are due the pension and the employer is not paying it or preparing something to compensate the employee.

      But we really need to get away from this idea of letting the big companies do as they please.

    • Anonymous says:

      West Baya where do I start?

      First the idea of a pension is to provide a livable form of income for those years you are not working. Experiance all around the world is that if individuals are not obliged to save for a pension then they wont and they wont make any other provision. The question then arises what happens to these people when they can no longer work. Oh yes everyone assumes the Government will take care of you, dont tell me that does not happen. I have lost count of the times someonehas said to me that they deserve help from the Government as they "helped build the country in the 60's, 70's et whether by going away to sea to work or sitting in some un-air conditioned office. Why do we have so many charities for such a small island, Meals on Wheels, several Thrift Shops, the soup kitchen in GT? Not because everyone made provision for their retirement when there was no pension requirement in Cayman thats for sure. I wonder how many people would sign a guarentee that they would never seek assistance from Government or Charities in return for not being required to be in a pension plan?

      Second, when funds are invested for a pension it is the duty of those charged with the governance of those funds to maximise the return AND minimise the risk. That means setting an investment strategy appropriate to the investment objectives and looking for the best provider to carry that out. Due to the nature of investments (that go up and down, anyone who tells you otherwise is trying to con you) part of the issue is not to put all your eggs into one basket. The idea of all pension monies being used to fund Government projects based on an aribary rate of return is nonsence. First of all if the Government defaults on its payments what happens then? Secondly who is 100% confident that the cruise berthing is still going to be drawing in the big ships and money in 5 or 10 years time. Its called speculation for a reason and that is why you spread your risk, if one fails you lose some of your money, if you have only invested in one place then you lose all your money. Effectively if it is a good enough proposition then the Government wont have to seek to use pension fund money, it will come to them from all over the world. Only if its a good enough investment proposition though.

      Thirdly the pension law has been around for quite a while here in Cayman. If any company has not included the cost of pension provision into their pricing structure by now then it will be of no suprise that they will fail. It is not like this is a new cost that has taken them unawares. As to companies going bust, if there is a need and a demand then that slack will be taken up by other companies that may be more efficiently run.

      I could go on but one final point is that I agree that the pension provision in Cayman could and should be reviewed but not to do away with it and condem people to living in poverty when they are too old or sick to work but to find a way that encourages individuals to save and invest for their retirement. Unfortunately that will involve a requirement to save to a specific level but we all know the current levels of saving are not sufficient so we have to find a way to get individuals (not employers) to add to what they have. If you dont like how its invested move it, dont just sit and complain.

      • Anonymous says:

        To your thirdly response.

         

        you need to crawl from hole you live in. Are you really that naive to think that all companies operate and are structure the same?….. For example a company that engages in long term fixed contracts, and governments introduces a massive fee after the companies contracts were signed do you really think that company can simply change their prices? 

        • Anonymous says:

          There is an assumption that a company bidding on a long term fixed contract is competing against other comapnies bidding on the same long term fixed contract and therefore subject to the potential of governmentfee increases. Its amazing how well run businesses are able to price these things into their deals. Maybe its a lack of relative experiance that leads to a business falling into trouble over something like this?

    • Anonymous says:

      I don't know where to start with this, I'll go for the obvious one. Most Government pension schemes that are underfunded are final salary or defined benefit schemes, whereby the institution pays a pension based on your number of years in the job, it's not based on how much is paid in.  ALL the schemes in Cayman in default are in defined contibution schemes whereby companies are taking funds from the employee and supposed to be paying them into a pension plan.

      In short the pension plans not being paid into here can't ever be compared to a defined benefit plan. 

      If you remove the mandatory element and leave it as a choice you end up with poor choices being made by people not to plan for the future, these same people with no retirement income then become a drain on Government in their retirement years when they need money to live.

      Pension plans take a long time to roll up the returns, it's a compounding element that makes them work, but they need time and constant investment to work.  Even small changes at the start – like the companies not paying into the funds for a few years can have huge impacts later on, this will only ever be at the detriment of the employee..

       

      • West Baya says:

        Yeh you seem to think you know everything, why don't you just explain that one little thing that's missing, "the pension" explain why those great nations/governments and multi billion dollar cooperations have loss people's pensions…. Explain why those people are better off today now that their pensions are lost. Explain why that was all such a great idea. You mention people won't be responsible, well reality check my friend,  they need to be….. And people will always be more careful spending their monies opposed other people spending it for you. You mention I would be speculating that dock will be built…… Don't you think your investor speculates when they tell you how well your fun is going to perform? Do you really thing they know?  You talked about spreading the risk, so did I…. That's  why I suggested the funds be spent on "infrastructures" I agreethis is hole different why in which pension are invested but has the old traditional way worked? I think not. 

        Theoretically you make all the sense in the world, but that's only if you don't think it. 

        • Anonymous says:

          Yes there are problems with the current pension system but throwing the baby out with the bathwater is not the answer.

          Lets agree what we are trying to achieve with pensions. It is basically to force people to put money aside now for when they are too old or ill to work. Lets face it without compulsion very few people do it, there is massive evidence of that in Cayman and every other country in the world. No one likes compulsion but lets face it how many people in their 20's and 30's etc save in addition to their pension. There is always something else, paying the rent, buying the car, going shopping in Miami, buying that new phone.

          Compulsion can only work if its a level playing field. That means it applies to everyone, whether you are a multi-millionaire or a street cleaner. It means there are stringent penalties on companies for not doing it. No point in letting one company underbid another on the basis their costs are lower due to opting out of the pension system.

          There is a lot of chatter about companies not being able to afford the pension payments. It is my experiance that when a company feels it can get away with not paying something they will do so and yes they will use any convienient excuse. If the cost of your service or produce has to include pensions then it should do so. Every other law abiding company is doing it, maybe the real reason is they are not efficient elsewhere. Knowing they would be taken to court very quickly after failing to make payment and have the fact they are delinquent publicised will make companies act responsibly.

          Basically I think we are not that far apart when we are looking at what is required such as spreading risk (by the way risk is geographic as well, all you investments in Cayman infrastructure and another hurricaine Ivan comes along could see you wiped out). There needs to be a proper debate about what is needed.

    • Foreign Devil says:

      Right on brother, what  made this country great was no tax low regulation pure capitalism, we have lost our way.

      pay people they money and if they wish to purchase health care and put money into a pension scheme, that's their business, and if and when the stock market crashes again and they saved money is cut in half it will be thier fault.

      hint Caymanians buy properties and rent out best gig in town.

    • Anonymous says:

      Ok Jordanian. Settle down. 

    • Anonymous says:

      9;36

      You are the most sensible person so far, which  has the balls to say it like it is.

      These thumb downers are living in the dark, many of them do not understand what is happening here.

      This atrocious animal our government coluded with the money managers, and put this animal in law. It  is going to destroy all of us. Small  Businesses Cant afford it!!!!

      It is my understanding, that certain politicians are in bed with some of the money managers and that is why this mess continues. Even though they know that their people cant comply.

       

    • Anonymous says:

      Could you please repeat that. 

  6. Anonymous says:

    The 16 businesses were listed as scape goats only the other 1000+ businesses escaped without even a slap on the wrist, same old same old.

  7. Anonymous says:

    I agree,  scrap the pension plan.  Most business are struggling to pay CUC and the cost to operate.  Most employees really do not want to pay any pension.  To those thiefing employers who deducted their employees contribution and did not report it; simply just LOCK them up.  Moving forward for 2014, employers should increase their employees earnings, treat them fairly and do away with this monthly deduction of pension that seems to be going  into a disappearing pot. Apparently it is not working. 

    • Anonymous says:

      I will only agree with you if there is a stipulation that the Cayman Islands government will NEVER be asked to 'help out' an old age pensioner who didn't invest their additional earnings. Unfortunately what we've seen in other places (and Cayman) is that if the money isn't sequestered as its paid its used on more immediate 'needs' with the result that people retire with no money to pay for themselves and then become a cost for the Government adn the earners of the next generation. Mandatory private pensions is an attempt to avoid that. Or at least alleviate it (10% pension savings rate is not enough). It doesn't work well but is the only viable option to a Social Security (National Pension) type system. Or letting poor old people starve in leaky buildings with no electricity. I don't mind which of the first two pension options you choose but I'm not fond of the third, though I realise it is a societal option.

    • Anonymously says:

      Don't scrap the pension plan, my advice don't go into business if you cannot afford to, nothing is for free do not expect to make all the profit while the employee work just to be able to pay bills and is unable to save anything for retirement.  Cayman's problem is greed and sadly it will be the demise of the country too.

  8. Anonymous says:

    This will be the same as the Pines theft. It's ok to steal from thee weak and vulnerable. Seriously, what is our governor being paid to do? Look pretty?

    How can she preside over such a bunch of charlatans, crooks and deceivers and say and do nothing? It beggars belief.

  9. Anonymous says:

    Well I guess as a business owner I should do the same as the rest off the 1100 so called offenders!!!

    WTF its the law and I am finding it  hard to keep the doors open and have been in business since 1989, but its hard to compete with other busienss that break the law and get away with it!!!!

    No pension, no medical, no over time and pick guys off the street for $5 an hour.

    Wake up Cayman this is a cancer and its spreading!!!!!!!!!!!!!!!!!!

  10. Anonymous says:

    Stop hiring new people. Just cut the employers off from permits the first year, and business licences the next. Done!

  11. Kato says:

    Mr. Marco Archer please advise the public the rationale why there are no  pension convictions?

    The rumors are rampant and I am confident you are  aware of the situation.  It's a shame how business is conducted on the island especially knowing this is going on under your watch. Where's the transparency?

    • Anonymous says:

      Wrong Ministry and this was going on long before their watch in any event. Stop trying to create a political football and focus on the issues. 

  12. Anonymous says:

    All this proves is that it was daft, ill-considered legislation when it was originally drafted and needs to be reviewed urgently. Where is the sense in forcing employers to pay pension contributions for ex-pats who (as is my case) are only in the Cayman Islands temporarily and have no plans to retire out here?

    • Anonymous says:

      Expats have to be included because if they are not they will be cheaper to employ than Caymanians, further disadvantaging Caymanians in the workforce, and in addition, would never qualify for PR.

      • Jack says:

        … like anybody qualifies for PR anymore anyway.

      • Anonymous says:

        One questionably valid point there on the financial side (but we get paid less for doing more anyway so where's the difference?) but wouldn't ensuring we don't qualify for PR be to the advantage of Caymanians?  

    • Anonymous says:

      LOL. As a Caymanian I have to say that is a ridiculous comment. And what happens when thousands of those expats become permanent residents and eventually gain Caymanian status and therefore have the right to live here in retirement?  

  13. Anonymous says:

    Complete incomptence!! Aren't those resposible for enforcement also violating the law? Prosecute the NPO and the entire Ministry involved for not prosecuting those in violation of the law and failing to do their job!

  14. Anonymous says:

     

    Thank you CNS for keeping this issue in the headlines! It is absolutely amazing to me that there is not more outrage by those employers who are complying with the NPL, and even more outrageous there has been NO action and NO enforcement against KNOWN violations by the government!
     
    Again, I would like to name and shame too!
     
    Amy Wolliston has known about violations filed in my complaint in July 2009 and has not enforced compliance.  The pension board has known of these violations since May 2011 and has not enforced compliance. The board even received evidence that the employer had "friends" and a "sister-in-law" on the board to thwart the investigation and enforcement, and took NO action!
     
    Mario Ebanks learned of these violations in October 2012 and has not enforced compliance.  
     
    The employer has a substantial ability to pay, but does not want to be "named and shamed" through prosecution…so Amy entered into a settlement agreement with the violator…and there is still NO pension plan with an approved plan administrator and NO contribution for the arreage for a Caymanian!! Not only did the employer and several employees collude to violate the NPL, but now the government is in collusion with the employer!!
     
    Mary Rodrigues and the Ministry have known of the violations since May 2012 and has not enforced compliance. Even further, she investigated the matter and closed the case after preparing an extremely unprofessional and inaccurate report, and attempted to thwart an ICO appeal (without success!)
     
    MLA's Rolston Anglin, Alden McAughlin, Ezzard Miller, and Tara Rivers have knowledge of the violations and have not enforced compliance. Tara Rivers passed it on to the Deputy Governor, who has not taken action, even though he stated he considers the matter very serious.
     
    The DPP and ACC have knowledge of the the violations and have not enforced compliance. The OCC is also aware, but awaiting action from the Head of Civil Service.
     
    There has been no prosecution and the Orders that had been issued were rescinded!!!!  The orders were issued in the amount of $277,822.53…not just a small amount as in most of the current prosecutions!
     
    But yet, those in a position to enforce the laws continue to collect their paychecks and turn a blind eye to the violations. 
     
    I've been told that this is a complicated matter. WRONG! It's very simple, there's NOT more to the story. Please enforce your own laws, enforce your own procedures, and stop trying to get in the back pocket of those with very deep pockets! 
     
    For those of you currently not in compliance…DEMAND that your cases be handled consistently. But for heaven's sake, somebody needs to do their job and get this mess cleaned up!!!
     
     
     
     
    • Anonymous says:

      There are two businesses that were prosecuted for non payment of pensions as a result both sold out their business but the issue was resolved.  If those two business were brought before the courts what about the rest?  I say what is good for one should be good for all.  These are the cases that should be cited and if employees continue to get the run around by the pension office they should join together bring an action in court and if that fails take it to higher authority the UK and if need be further.  

  15. Anonymous says:

    And wht happened to the law that was going to be looked at that pension would only be for caynanians and no more work permit holders…why should employers put in for work permit holders when they are taking their money out of the cayman islands,nothing is staying here.  Let emloyers contribute for caymanians only, we will then also get rid of the delinquent payments…Tara, you weren't there to vote for the new immigration law don't start spending more of my hard earned money on hiring more individuals for government who are redundant

  16. Foreign Devil says:

    Civil disobedience rules. Pension and health care laws should all be repealed, and let the workers take it out if they want it. 

    Let the private sector sell these policies to the people.

  17. Anonymous says:

    Seems to that government are dodging all that is important. I think this should be way ahead of the conservation law.  Its been ten years in the making so a few more months would not hurt while we clean up the corruption in government!

  18. Anonymous says:

    Too much political influence.

    Wealthy people take care of eachother . . . . .

    • Anonymous says:

      Come on Government – get this sorted out. Why are you sitting back watching a few stealing from so many?

      Frankly, anyone who is sitting by watching this and is not doing anything about it to ensure that the offenders are properly dealt with does not deserve to be re-elected.

      Quickly, pick a couple fo the biggest offenders, seize their property if you have to, throw them in jail for a bit and the rest will start toeing the line very quickly…………

  19. Anonymous says:

    Why waste MORE money on a so called proactive inspection…why, isn't that what the pension people Chamber silver pension and all the others who are in charge, aren't they to report this to the pension department????

    • Anonymous says:

      Inspection? What inspections? Ask them to show the public how many inspection have been done and we all will be left with our jaw dropped open- cause NONE have been done.

    • Anonymous says:

      These violations have been reported by the pension plan admistrators (consistently and for years) – it is the NPO that has failed to take appropriate enforcement action.