Dart bent pension rules

| 08/01/2014

(CNS): A catalogue of documentary evidence collected by the former spouse of an ex-Dart employee as a result of divorce proceedings demonstrates that the island’s largest investor and major employer allowed some employees to opt out of the mandatory legal requirement for pensions. Although government officials said Dart is no longer allowing this to happen, for several years some of the developer’s investment experts were given their pension benefits and allowed to invest the money as they saw fit rather than paying into one of the six mandated funds as required by law. It is understood that no sanction has been taken against Dart but the director of the new labour enforcement agency said this doesn’t mean other employers and employees can follow suit.

Mario Ebanks said that the situation with Dart is being monitored and, despite the discovered infraction, the company had quickly rectified the situation when it was drawn to the management’s attention as a result of a complaint.

“In our compliance review of the Dart organization last year the NPO uncovered two such cases of non-compliance, which were quickly resolved by the company when it was brought to their attention,” he said. “The NationalPensions Office (NPO) and the other regulatory agencies in the CI Government are collaborating with intelligence and systems to ensure that all employers are complying with the relevant Laws. The NPO continues to engage Dart, and its newly acquired businesses, to ensure that the National Pensions Law and Regulations are being complied with,” he said.

According to the documentation, seen by CNS, much of which was released via a freedom of information request, Dart was meeting and going beyond its financial obligations under the law to the employees involved.

However, it was allowing at least two and possibly more of its employees to do what they wanted with the money for wellover a decade. The issue came to light in 2009 during divorce proceedings between Karen Avery and her now ex-husband, who was a long time employee of Dart both in the US and here in Cayman. During the legal battle that followed the couple’s marriage breakdown in Florida, Avery requested details from Cayman’s NPO for her husband as he had told the courts in the divorce proceedings that there was no pension in Cayman. The NPO confirmed that it was indeed the case that there was no fund for her husband, despite his long employment here with the major developer.

In a letter sent to Avery in November 2012 Amy Wolliston, the Superintendent of Pensions, said that she had issued an order in March that same year under the National Pensions law to the employer to pay the sums into a pension plan on the basis that she believed the employer had contravened the law.

Subsequently however, Dart appealed that decision and the NPO made a decision not to defend the appeal based on advice from the legal department. It is understood that a confidential settlement was reached between the pension’s office and Dart over the issue and the file has been closed and the terms of the settlement are under wraps.

While Avery is still attempting to pursue her complaint against the NPO for not enforcing the law, the issue raises other questions as many employees in Cayman have concerns that the pension schemes they are forced to participate in are often badly managed or mismanaged, especially the investment experts that work in the country’s offshore industry who undoubtedly believe they could make the cash work far better.

Nevertheless, Ebanks, who as director of the new government labour office now has responsibility for enforcement of the pensions law, said that government would not allow employers and employees to collude in any ‘opt out’ of the local system. Instead, he has encouraged them to invest additional amounts in other financial schemes on top of the basic percentage the law requires to be paid into just one of six locally based schemes.

Ebanks noted that the current pensions law is nothing more than a “safety net” in terms of retirement planning as he said the contribution rate is only 10% of employee earnings and unless the contribution rate is significantly increased, as has been recommended in the Mercer Report, or unless pension funds begin performing exceptionally well, many employees will have very meagre pensions to depend on unless they invest in additional financial products.

He said the government “encourages all employees to properly and wisely invest any other portions of their disposable income, to ensure that they maximize their retirement options and thus enjoy comfort, financial independence, and dignity in their golden years, and do not become a burden on the country’s treasury,” he added.

Category: Local News

Comments (49)

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  1. Anonymous says:

    Let me get this straight…the complaint was in 2009, the NPO worked on this til 2012, the FOI worked on this, there is a catalogue of documentary evidence researched by CNS, there are numerous comments on all sides of the issue… but where are the powers of authority? Perhaps with their heads in the Camana Bay sand?

  2. Anonymous says:

    Judging from the thumb positions, most people here seemto be in favour of people managing their own pensions.

    I just don't understand why they dislike the idea of me investing my pension money in beer and trips to Cuba and then have the government take care of me when I'm old and decrepit.

  3. Foreign Devil says:

    The non tax paying people of the Cayman Islands should be allowed to invest thier whole tax free salaries any way they wish.

    the non tax paying people are offended that our elected officials believe that we are to stupid to use our money so they should take some of it from us and put it into losing pension plans and health care plans that we do not want.

    repeal all two laws.

  4. Anonymous says:

    Get rid of Pension for Permit Holders!

    Because with the new immigration law not hardly anyone will get PR anyhow.

    This hlp give companies a break from the terribly high fees they now endure.

    Make it voluntary for Caymanian workers/companies to contribute.

    Go back to simpliticy and put maoney back in peoples hands.  Under the current scheme pension will be gone at retirment anyhow.

     

  5. Anonymous says:

    Its my money and i want it nowwwww! 

     

    Yes I agree the real thives are the pension provider who dont know shit shit how your money is being invested and only cares that they are getting paid.

     

    And until CS start contributing they should not claim that Government is stealing theyre money either.

     

     

  6. Anonymous says:

    NPO: Did you intentionally leave this off your name and shame list??

    Mr. Manderson: These are very serious violations under your watch! XXXX Did you have knowledge of these violations?

     

  7. Anonymous says:

    The pension law in Cayman is an unenforcable joke.

     

    Scrap it.

  8. Anonymous says:

    Talk about trying to make an issue out of a non-issue.   Instead of the funds going to a pension fund and incurring management and administration fees (about 2% per year), two investment professionals managed their own contribution.    So what???  Who is being harmed? 

    Pensions are for the benefit of the employee, and if the employee is a financial professional and can manage it on his or her own, such that the value to the employee is increased, then what is the problem?

    • Anonymous says:

      No problem at all if it weren't outside of the law and mandatory for everyone else.

  9. 4Cayman says:

    Once again the rich get a free get out of jail card. Let that had been any small business and you will see what extent of the law and fees would have been imposed. It is getting ridiculous how the laws of the land are only made for the poor people to abide by. No wonder everyone is getting involved in some crime or the other.

    On another note, with incomes being stalled for the past three years and inflation continue to rise coupled with the pension withdrawals, will there be anything left for those scheduled to retire in the next 10 years? As I see it, the pension scheme is already bust.

    • Anonymous says:

      Do you understand pensions?   Others withdrawls have no effect on your assets. 

  10. Just Askin' says:

    Where do I sign up?

  11. Richard the Lion Hearted says:

    AND I QUOTE:

    Ebanks noted that the current pensions law is nothing more than a “safety net” in terms of retirement planning. He said the government “encourages" all employees to properly and wisely invest any other portions of their "disposable" income, to ensure that they maximize their retirement options and thus enjoy comfort, financial independence, and dignity in their golden years, and do not become a burden on the country’s treasury,” he added. Financial Burden? I Can't Believe You Said Those Words! What do we call all those overpaid, underperforming yes men on Government's payroll, whose pensions are being paid, by those same poor souls that you are advising to find extra money to put into some other savings vehicle because there might be little or nothing left in their pension plans when they retire. Those plans that that have been approved by Government. Those plans that  are losing their hard earned money, while enriching the fund managers.

    INTERPRETATION:    We understand that most of these pension saving plans are loosing money thus we suggest that you do what Dart did. But remember I didn't say this! We know that unlike my self, you really have no "disposable income" so we suggest you forgo the babies milk this month, and next month you skip one meal a day for the month and so on and so on. You get the message!! I know you are asking how those people at Dart who make all that money are allowed to  not pay their pension as we have to? Well you see he's Mr. Dart and some of his employees get away with these things. They're not dumb ya know! But you are a foo foo Caymanian so if you try it you are going to court. "It's Not For The Lack Of A Tongue Why Some People are Quiet!! 

    Is it any wonder then that, this Island is going to hell in a hand basket. Remember I've said it many times. Corruption is alive and well in the Cayman Islands. We hire those inept persons who could not cut the mustard in private sector and put them in responsible positions where they are expected to uphold the laws of the land, but instead they become yes men for those who hire them, and the integrity of that position which they hold is totally corrupted due to a lack of enforcement. 

    I have some sage advice! Don't get too comfortable! Cayman is a very unpredictable Island. Things do change quite rapidly!

     

  12. John says:

    Maybe we should see how the pension funds that were invested privately compare to the funds of employees in the mandated pension funds.  If they are really concerned about the well being of workers in Cayman then the worker should be allowed to invest his/her money in the investment(s) that they deem best.

      

  13. Anonymous says:

    The story behind this is the law needs to change, I would love to get my money back from these pension companies and invest it myself, personally I would put in in local companies such as cuc and water company, as I am sure these to companies would at least give me a dividend or put it in a local bank at least I would not loose. 1/2 percent is better than the losses these pension funds have done with my funds.
    As for. Dart good for you.

  14. Anonymous says:

    This Government needs to again look at the Pension Scheme very closely and do a complete overhaul and plug all the holes that Employers and Employees seem to be able to take advantage of e.g not collecting from some, not paying for their employees at all or if they are collecting not putting into the employee's Pension.

    I am not saying that we don't need some kind of investment plan for our golden years if there is such a thing anymore but this Pension Scheme that has been made law by the Cayman Islands Govt  doesn't fit the needs of the people at least most of them. 

    Why don't the Government allow those that have been retired from companies have full access to their Pension Funds with terms and conditions?

    There are people that have been forced to take early retirement or met the retirement age that haven't been able to find another job and is living in poverty and these people have worked hard all their lives and have to leave their Pensions in the hands of people that are reckless with investing it. 

    The RSA of $12000.00 to the retirees should be reviewed cause someone paying a mortgage of say $800 or $900.00 a month and isn't fortunate enough to get another job  a dog's life on the street is better than theirs.

     

     

     

     

  15. Anonymous says:

    Dart allowed some financially informed staff members to make their own pension investment decisions, which is a breach of the law, even if it was with good intentions. (it could also be argued that they discriminated against other members of staff who were not allowed the same choice). The headline is exactly correct – they bent the rules, so some of the posters above should, frankly, calm down..

    Quite apart from the employer compliance issues that have been well-aired in recent weeks, this article highlights the other big problem with pension schemes in Cayman. My two small plans here have struggled to reach 4% return per annum recently (and I'm told that that is abnormally high). After inflation, that is more like 1.5%. As a (rather average) personal investor, I can make around 7% a year and my overseas private pension plan has averaged around 8-9% return for some years (it even managed a positive return in the 2007-2008 meltdown). Why are the returns in Cayman so low? Perhaps it's because the plans are poorly run, or perhaps it's because they levy large fees.

    A number of changes to the pension rules are needed, such as self-managed plans for the financially literate, access to approved overseas plans and funds and limitations on the management fees that can be charged by the local "approved" funds (similar to the UK's stakeholder pension regulations).

  16. Anonymous says:

    Yeah OK, so you put 10% of your pay into the hands of the CIG to invest for your retirement.

     

    Good luck with that, the CIG pension fund is in shambles and there no where near enough money in it to meet it's obligations.

     

    And who want to trust thier retirement to people who can't even balance thier own budget.

     

    What a ripoff!

    Why do you think there suggest investing elsewhere in addition to this, becuase they know you'll never see that money.

  17. Anonymous says:

    As far as I am concerned, my pension 'contricbutions' are pretty much legalized theft and a slush fund for government. I can say with confidence….although I sincerely hope and pray that I am wrong, that when I reach pensionable age, there will be little or no pension for me to receive.

    If Dart can give his employees the option to opt out of pension payments, then why can't I have that same option?  My pension contributions amout to approimately CI$650 a month, and I'll be lucky if I get half of that back. 

    Give me my money and I'll put it in a fixed deposit, even if I don't gain a singe PENNY in interest, I'll still be better off and at least will know that my money will be there when I need it. 

    • Anonymous says:

      Hey as far as your concerned?  I have a questions for you!

      a) if you know that your contributions are a slush fund for goverment why are you contributing more than you should? arent you aware that mandatory contributions are capped at 250.00 per month?

      b) As a government worker you really dont contribute shit so stop complaining.

       

      I can agree that investing in anything other that this pension crap is a far better option.  

       I mentioned before that mandatory contributions should be stopped especially for foriegn workers and the law changed to voluntary contribution by the employer as a way to offer a benefit to attract better people.

      do anyone really think that if the US, UK, and other large european and asian countries cant manage their own pension schemes that Cayman will be able to? again it will never work.  your suggetstion of being responsible and investing your money yourself is far less risky. even a simple fix deposit offers a better return that this pension shit.

       

       

       

      • Anonymous says:

        Sounds like someone is just a tad bitter they they have to 'contribute' to their own pension.  Tsk Tsk Tsk.

  18. Anonymous says:

    The laws don't apply to those with deep pockets!

    So, why were they only required to start complying once they got caught? Can everyone wait til they are caught and enter into agreements with the government not to do it again without consequences? 

    Did the government "verify" that the benefits were received when the employee states "there was no pension?" Did the government really "believe" the violators, or just cover-up the violations?

    This is not just a pension problem….it's all about manipulation and power struggles….quite a few people let "their friends" and "their lawyers" run the island "their way" …yet again!  Laws only protect the lawyers!

    Good job CNS for exposing this…again!

    • Anonymous says:

      It is ironic to see someone in the Cayman Islands complain about laws not applying to the rich, given how many are employed making sure the world's rich don't pay their taxes like ordinary folks.

    • Anonymous says:

      "The laws don't apply to those with deep pockets!"

       

      … or to those who are politically well connected.

  19. Anonymous says:

    This employee was smart not to have his money invested in some crappy Pension Plan.

     

     

    • Anonymous says:

      ALL employers take note! This is the way to go. I like the idea of letting me chose what to do with and where to invest my pension. This way or abolish it all together as pension plans are losing money not gaining. My last statement before leaving a past employer showed a balance of $15,300 and the latest statment shows where it dwindled down to a lil over $8k…RIDICULOUS!!

    • Anonymous says:

      But its so annoying that i justcouldnt break the law and save my own money that has been lost!  Oh well back to being a law abiding citizen.

    • Anonymous says:

      You are part of the problem!

      I guess the rules don't apply to you either? I guess you also agree that it's ok to hide assets from your spouse too! 

      We need people to be part of a solution

    • Anonymous says:

      Unfortunately smart and illegal is the problem here. I'm sure many of these people do this mainly in order to protect "their" money in the event of a divorce. 

    • Anonymous says:

      Where the employee should have the choice on where his/her money is invested and I 100% agree this pension thing in cayman is losing our money everyday, the law is the law,but OF COURSE certain companies in cayman can get away with things where other's can't…government now should give a waiver of sorts like they did for immigration for delinquent pension holders…its only fair…..lol..

       

      TO the new government "I thought you were going to try to get rid of pension for permit holders????? Its a waste of our money!!!"  goes to show you how the rich can get away with anything…

       

      Can't justify this one…

  20. Anonymous says:

    Two laws: one for the rich and one for the poor. 

  21. Anonymous says:

    The almighty $$$ our government!

  22. Anonymous says:

    Talk about bitter& twisted!!!!!

    Wow, your headline makes it sound like Dart has been doing what a large percentage of Caymanian business have been doing for years – taking the employee's money and not paying it in to the pension fund. However, this is NOT the case at all.

    It would appear that Dart elected to invest TWO EMPOLYEES pension contributions – out of how many hundreds of employees – themselves. Perhaps these two employees were financially monded and felt that the paltry returns offered by our local pension investment companies was not in their best financial interest. This is like a 'self-administered' pension scheme which are perfectly legal in other countries.

    This begs the question that perhaps we should have more pension investment options available to us. With inflation ever rising negative or less than 1% growth in these pension funds is actually losing money in real terms. If I were more financial savy I would do the same – indeed we all should.

    Maybe the headline should have said – "Poor Pension Returns Highlighted By Dart Self Admin Scheme". But alas that doesn't stoke the fires of DartHateDom.

     

    • Anonymous says:

      Nice argument, sweet and deceptive. Did he break the law or not?

    • Anonymous says:

      Seriously nieve! Do you really "believe" they paid theirpension? 

      The employee admitted that he didn't have a pension.

      Why would there be the need for a "settlement agreement?"

      There are a lot of holes in their "story!"

    • Foaming at the mouth says:

      Some good points you’ve made. However, the fact remains it’s against the law to do “self-investments” or the like. Another fact that also remains, just about any other company would be in court to answer for skirting the pension law as such. No matter the headline, a law was broken and must be seen as equal to all, or at minimum, appear to be. As brought to light by CNS, that’s not the case here. I thank you for that, CNS.

    • Anonymous says:

      Good use of the word scheme @dartmydaddy.com or whatever your name is. 

  23. Anonymous says:

    I'm sure it was a one-off anomaly. It's not like Dart to ignore national governments.

  24. Anonymous says:

    Mama seh "wha you do in dark always come to light"

  25. Anonymous says:

    > It is understood that no sanction has beentaken against Dart but the director of the new labour enforcement agency said this doesn’t mean other employers and employees can follow suit.

     

    Yes that's right. The law only applies to the "little people".

  26. Anonymous says:

    A self-directed retirement plan run by an investment professional? That's not an issue to me. There are numerous people on this island that would love to direct their own retirement investment…the concept is not unheard of in other countries. The bigger issue in my view is the multitude of employers who STEAL the pension monies from their staff and never submit it to one of the recognised pension plans along with the lack of enforcement against these violators.

    But of course this is just going to be twisted into the big bad Dart story because that will grab the headlines and divert attention from the bigger issues on this island

     

     

     

    • Anonymous says:

      Well…. they did break the law. You can always prioritize and shorten your list to make it appear (to you) that it's not important ( after all, Hitler did kill 6 million Jews) but, they did breaks one teeny tiny law; at least. 

      • Anonymous says:

        Yea, but the law is stupid.

         

        • Anonymous says:

          That only means that the law should be changed, not that you are entitled to break it

        • Anonymous says:

          Oh, so we can go around deciding which laws to observe based on our assessment of whether they are stupid? That is a recipe for lawlessness.

        • Anonymous says:

          The law that I can't slap you in the face is also stupid

  27. Coconutz says:

    Selective enforcement means different rules for the rich.  The rich steal money and get off (often without having to pay it back), the poor steal a dollar and get 20 years in the slammer; lest some other poor soul even dare think about stealing.  The rich attend church and pat themselves on their backs for being God-fearing Christians, donating a dollar for every million that they've stolen (while making a big spectacle of it) while the poor…  Humanity at its best!

  28. Anonymous says:

    Good on them for doing it while they could.  I wish my pension fund did not get sent to the comedy local providers.  It is being invested in a way that is entirely inconsistent with my personal needs.  One big example is denomination of investments.  For most ex-pats the pension should be denominated in the currency of their homeland as otherwise there is an element of currency speculation.  The money in my pot is never going to stay in Cayman or be applied in a dollar-based economy. 

    • Anonymous says:

      Long before government mandated pensions private sector  employers/employees were paying into pensions funds that was being run by the head offices of offshore companies registered and operating here.  Most  employees had accumulated very good pensions then these companies were told they had to transfer the funds to these local pension providers who had been wasting/losing peoples hard earned dollars ever since.  I don't understand why we all cannot band together and demand that they allow those of us who are still working with these firms, who knows how to invest our savings to allow our head offices to again represent us.  These cracker jack pension providers should be taken to court for losing our money. The only one getting a return is the pension providers directors and officers. Let us put pressure on them to make some changes here or else we will all get old and have nothing to live on. The supervisors of pension should really look into the way the pensions are being managed and try to salvage something for us for our old age or more of us will be finding our way to social services door begging in another few years.  It is our money and we do have a say, we just have to band together together for the cause.