OCC tackles pension troubles

| 28/01/2010

(CNS): In her first own motion report the Complaints Commissioner will be tackling problems at the National Pensions Office. Nicola Williams  announced the launch on Thursday of an investigation by her office into the ability of the NPO to effectively investigate, charge and convict companies who are non-compliant with pension contributions as mandated under the law. Williams said that initial investigations had revealed that as many as 670 employers are delinquent in their pension obligations but have taken the money from their employees.

“I determined late last year, in accordance with the Complaints Commissioner Law (2006 Revision), Section 11(1), that there are reasons of special importance which makes this Own Motion investigation by my office desirable in the publicinterest,” Williams stated. “These arise from the plight of working men and women who every month have funds deducted from their pay cheques thinking that these monies are being contributed to a pension plan which will help provide for themselves and their families in retirement.”

She said that this issue mostly impacted poorer people in the community and an independent investigation was in the public interest so that an understanding of the government’s practices can be made clear and actions required, if necessary, to better facilitate the management of this process.

She indicated that it was not a matter of a particular employer or individual case that had led her to believe the investigation needed to be undertaken, but considerable evidence from various sources pointing to a large number of offending employers.

“I am aware of some 670 companies that are not complying,” the complaints commissioner revealed, adding that she was surprised by the number. There were approximately 4,075 valid trade and business licenses in Cayman at the end of 2008. However, many business owners hold multiple licenses which indicates that a very significant percentage of employers are not complying with the pensions law.

Although the Legislative Assembly has rarely responded to any of the OCC’s reports in the past, Williams said she hoped that this would be the one that would see politicians spurred in to action over the very real problem faced by the Cayman Islands work force.

“We would hope the Legislative Assembly will pay attention to the report as what we uncover is likely to be of such importance, affecting so many people there will be no choice but to act,” she said, adding that, as with all ombudsmen, she had no powers of coercion merely the power to issue recommendations.

“To date, myself and my team have experienced full cooperation from the NPO and it is likely that the report will be ready on or before the end of May 2010,” Williams said, adding that the team will conduct interviews with affected parties and review ministry documentation relevant to the subject. 

The OCC’s investigation comes at a time when the future of the NPO as the supervisory body for the pension’s office is in already in question with speculation mounting that the Department of Labour in partnership with CIMA could be taking on the supervisory role. The mandatory obligation for employers to pay pensions for work permit holders could also be removed in the near future. The idea was first raised in the Legislative Assembly by the Premier when he announced the increase in work permit fees for the 2009/10 budget.

Minister with responsibility for labour, Rolston Anglin, told CNS last week that his office is looking into preparing proposed legislative changes to the current Pensions Law to bring to the Legislative Assembly at the next sitting, which is expected to resume at the end of February.

Williams stated that if government introduces any changes during the course of the investigation then they will be taken into account but she was focusing on appears to be the inaction against non-compliant employers who owe money to their staff.

Anyone with information relevant to the investigation may call the Complaints Commissioner’s Office at 943-2220.

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  1. chief cook and bottle washer says:

    There is an underlying theme to some of these stories that is begs a question or two to be asked.

    At what point does government and private companies get serious about enforcing the laws  and agreements made. To list a few examples:


    Non compliance in paying pensions

    Non compliance in paying health benefits

    choosing not to pay garbage fees

    choosing not to pay speeding tickets

    choosing not to declare/pay duty on items purchased overseas

    choosing not to pay for the permit fees of employees

    and feel free to add your own… 

    what kind of a culture of employers and citizens does this illustrate? One indoctrinated with an entitlement mentality? How Christian like is the above? No regard for common law?

    As much as it would be painful and against the will of many I think Government needs to ratchet up their collections of past due fees, fines, and law breakers. Enforce all the laws, payment schedules, and fees to the furthest extent and this will help the country coffers and start changing the attitude of the country owes this to me, or I don’t like that law etc. 

    Do your part everyone— pay your bills and fulfill your obligations on time. 

  2. Confucioused says:

    Case 1:  An employee has deductions made for both pension or health insurance.

    Case 2:  It is up to the employer to collect, and submit same to both the Pension Administrator and the Insurance Provider.

    Problem 1:  Both the Pension Administrator and the Insurance Provider depend on the employer to submit the correct amounts.

    Problem 2: They may or may not find out at all whether the correct amounts are being submitted as there is no connection between them and the issuance or work permits.

    Problem 3:  The employer who may not be submitting contributions for some or all workers holds the work permits of said employees.

    Problem 4:  Supposing an employee finds out about non-submission of pension or health insurance contributions.

    Who do theyturn to?

    Problem 5:  The NPO and the Health Insuirance Commission.  Which in turn sends letters to the employer.

    Problem 6: Which the employer ignores because there are already 670 cases before theirs.

    Problem 7:  In the meantime suppose the employee loses their work permit.

    Problem 8.  If they did not know about the non-submissions before leaving they will not know until the two year waiting period is up.

    Where are they now?

    What do they do?  Write a letter? Make a phone call?  To whom?

    And who cares anyway?  They’ve left.

    This system is designed for failure.  It is designed for abuse.

    The NPO is understaffed.  Granted.  But has anyone stopped to ask themselves why there are over 600 employers who feel that nothing will happen when they don’t make contributions?  Which have already been deducted from wages.  Not because of under-staffing.  Because the system is shot full of loopholes.  It is to put it mildly a cruel joke.  And is also seen by many of these same employers as a method to simply reduce wages.



  3. au revoir says:

    and, of course, nothing will come of it.  as long as government feels that it does not have to fulfill its own pension obligations, pay late, or change the rules as they feel, the small potatoes will follow suit.

  4. Macman says:

    Will the commission also investigate the very poor performance of the Pension Funds here? Can any one tell me if any fund on the islands has actual made more for the contributor that what they have invested??

  5. Mozzie Fodder says:

    Is the Cayman Islands Government paying pension contributions to their employees or are they still unable to make those payments?

  6. Bobby Anonymous says:

    I am all for pensions, but why should I pay 5% of overseas workers pension just for them to take away when they leave?

    Bussinesses struggle enough as it is, why can’t I get my 5% back and give them their 5% when thay leave?

    If you are here for the rest of your days, then great, you need that for retirement. Let the others pay their full 10% or make it optional.

    • The foreigner says:

      You should pay because it’s the right thing to do. Laws should apply to everyone evenly.

    • frank rizzo says:

      Because they earned it. Pension, insurance and the like are a cost of doing business.

    • Anonymous says:

      Pension should just be for Caymanians not permit holders, they take their monies with them off the Island.  This is what was The Premier supposively proposed when the work permits increased.  Pensions are losing monies that employees and employers have put in with the present economy.  Why should it be the employers responsiblity to pay for the employees retirement, they pay them a salary!!!!  Health Insurance is a MUST!!!!



      • Anonymous says:

         Yes.  Ex-pats should not receive pensions.  Which will mean that not only will ex-pat workers be better trained and have more job experience, but they will be much cheaper to hire than Caymanians.

        How deep a hole do you intend to dig for yourself?

      • Anonymous says:

        Genius, and then when they become Caymanian after marying a Permanent Resident, or Caymanian,  or become Caymanian through other means, who pays for and supports them in their retirement? YOU! 

        Basic human morality obviously does not sway you to doing the right thing, perhaps that will.

    • O'Really says:

      You don’t pay their pension because they are " overseas workers", you pay their pensions because they are your workers. 

      Mandatory pensions were introduced here in large part because Caymanian workers did not voluntarily provide adequately for their old age and the Government wished to limit future obligations to fund Caymanian’s in retirement. Foreign workers were included primarily to stop Caymanian’s being disadvantaged in the work place by making them more expensive to employ.

      And whether you’re " here for the rest of your days" or not, you still need a pension program in retirement.


    • CSI says:

      Because it’s the law, genius.  When you hire somebody, that’s part of the cost of hiring them. 

      • Bobby Anonymous says:

        Love you to Sherlock. Hire a Local, Keep the money on the Rock!

    • Anonymous says:

      The pension is fo retirement for expats as well.

      As for paying it when an expat leaves, what is then too stop you not paying it? the expat has already been forced to leave.

      It is part of their remuneration package you agreed to when you hired them.

      No why do we have to give expats vacation? all they do with it is leave the country and don’t bother doing any work while they are away


    • Anonymous says:

      Because it is the law and they are human beings! 

  7. Anonymous says:

    The Cayman Islands Government’s National Pension Office website states:

    Ensuring the effective and efficient administration, implementation and evolution of the National Pensions Law and Regulations


    What a joke, “…effective and efficient…” another lie being told by successive Government administrations.  (http://www.npo.gov.ky/portal/page?_pageid=1187,1&_dad=portal&_schema=PORTAL )

    Government has never "effectively and efficiently" implemented the National Pension Law! 

    The Complaints Commissioner investigation is most welcomed and long overdue; Yes, the pension regimes in both Government and the private sector are leaky ships because Government has neglected to do maintenance.

    In the middle of a raging financial and pension hurricane Government is proposing to change private sector pension plans from one leaky ship they did not maintain to two leaky ships also in need of maintenance and both with dismal track records of not protecting the interests of Caymanian Workers.  This proposed pension change will not benefit Caymanian Workers.  

    Government, do the necessary maintenance you failed to do to our pension ships.  The proposed changes to split the pension regime between two Government agencies will result in our workers and future generations paying for the current Government’s devastating pension decisions.  This is a perfect formula for governance unaccountability.

    “Good Governance” what a joke.

    Remember how Hyatt was allowed by the Labour Office, Ministry and Minister to withhold 1 1/2 Million Dollars of workers gratuity and nothing was done by Government?  Government worked to protect Hyatt and not Caymanian workers, who never received their gratuity payments.

    Remember how banks were allowed by CIMA and the Financial Secretary to drift into failure, First Cayman Bank, Euro Bank, Bank of Bermuda, to name a few?  In some of these bank failures top civil servants and politicians were allowed to withdraw their funds before the banks were closed down. Caymanians lost Millions of dollars in these bank failures and Government still refuses to insure Caymanians’ bank deposits. 

    Remember how insurance companies were allowed by CIMA and the Financial Secretary to drift into failure, CNB / Cayman General Insurance, Dyoll, Clico, British American Insurance, British American Insurance Pension Plan in these failures Caymanian workers lost millions and we are now also paying increased taxes to fund Government bailouts from bankruptcy.

    Government is now dictating change of pension ships in the middle of a pensionhurricane without consulting the crew or passengers.

    Government do something new, pay attention to and maintain the pension ships you now have.

    Government seems to forget that pension funds are the assets of workers, Government must check with them before making these changes.  Pension funds are not Government funds to be spent on Government projects.

    Workers in the Cayman Islands protect yours’ and your childrens’ future, stand up, speak up in your thousands, respond to the Complaints Commissioner invitation, report your experience with both the Government and private sector pension plans.

    Changie for Changie never solved problems!


  8. Anonymous says:

    Great news that someone is finally looking into this issue.  The OCC should also look at those employers who are not making health insurance premiums for their employees.  If they are not making pension payments, most likely they are not making health insurance payments either.  These employers who steal from their employees by taking the deductions and never submitting the payments to the pension providers should be shut down or even sent to jail.  If an employee stole funds from the employer, what would happen to them?  They lose their jobs and may even go to jail.

    • The foreigner says:

      Where is the Attorney General? This screams out "criminal fraud." Why isn’t there a grand jury investigation?

      • Anonymous says:

        AG prolly got his head buried waaaaaaaaaay down in the sand as usual.  Don’t forget from his past record (particularly with the elections debacle) that he’s not particularly proactive when he is supposed to be!

        This pensions issue has been ongoing for years, and this is just the tip of the iceberg.  Its time all this lawlessness was exposed and addressed and I applaud the Pensions Office if they are finally going to do something about it.

      • Perhaps says:

        . . . because we don’t have grand juries?

        • Anonymous says:

          Grand juries exist in common law. Attorney General should man up and earn the pay.

      • Anonymouse says:

        Because there is nogrand jury system in Cayman.

  9. John Evans says:

    What Nicola Williams will find is that the NPO (and the HIC if she checks them as well) has been consistently under-resourced for years and, while the officers available have done their best in very difficult circumstances, enforcement has often simply been compromised by the complexity of the current laws.

    I can remember working on this as a story (ironically at a time when my then employer was failing to pay our pension contributions) back in 2007. The contrast between the powers I enjoyed as a UK civil servant back in the late 1970s and those given to the NPO was astounding. Whereas we could do unannounced spot checks on suspected deliquent employers, the NPO had to complete a complex letter-writing exercise before going in. In simple terms whereas the UK laws allowed proper enforcement, their Cayman equivalents only served to frustrate the process.

    And one of the other posters is absolutely correct – taking money from an employee for pension or medical insurance payments and not passing it on is fraud. Why this has never been acknowledged by the authorities is a mystery (well maybe not so much of a mystery but I will let others comment on that).

    In the UK there’s a ‘catch all’ offence of false accounting, which is now widely used by my former colleagues to deal with a range of offences – it would be ideal for tackling the issues of non-payment of pension payments and medical insurance.

  10. Anonymous says:

    Let us hope that the OCC targets the largest employer and violator of the Pensions Law – the Cayman Islands Government.

    I wonder if the OCC will move on to other workplace inequities such as the non-payment of gratuities to hospitality workers, workers forced to pay for their own work permit, workers who are forced to work over 100 hours per week and the employment of workers in various sectors who work solely on commission which is contrary to the Labour Law?

    Good luck to you and your office Mrs. Williams. 

  11. Anonymous says:

    At last!  My company is one of those that is compliant with both health and pension contributions so when we bid on a job we are often higher than others.  Therefore, we lose out on a contract to those companies that break the law.  Sad isn’t it.

  12. Concern Native says:

    Good Job Commish and your competent staff!

  13. Anonymous says:

    It’s about time!! A few years ago, the Compass headlined about a ‘mystery’ regarding civil service pension funds (if my miemory serves me right a figure of around $170m was mentioned) and the story was suddenly stifled. I wonder why?

    I would venture to suggest that if any civil servant wanted to find out where their pension funds are invested (obviously not locally) and by whom are they managed they would not be able to get an answer.

    I wonder, with the Bear Stearns and Lehman Bros decimation of the global financial industry and Madoff ponzis, which have affected pension funds worldwide, what makes anyone think those of Cayman Islands civil servants were immune?

    I trust the OCC operates independently and without fear or risk of influence, thereby revealing the truth.

  14. Anonymous says:

    You go girl! While you are at it, if an employer deducts my pay and spends it on a new car while pretending it is going to my pension, how is that not fraud? How is that not theft? How is it the Police are not involved? How is it that licences are renewed and granted to such people? How is it that such people are allowed work permits to bring in yet more people and abuse them.  I don’t know you but I think I really reallylike you. Be careful though, I like Dan Dugay for the same reasons! 

  15. Scary says:

    Isn’t it odd that a Mac appointee focuses on other people when the OCC has been one of the few bodies which has been able to publicly expose misconduct in goverment?  This review is not welcomed because it is another example of Misickisation of the the Cayman Islands.

    • Anonymous says:

      Please read carefully and don’t speak so harshly when you are obviously misinformed. I don’t like Mac either, but your comment is clearly ignorant and there are many more legitimate areas where we can criticise our dear leader.

      1. The Complaints Commissioner is appointed by the Governor, not the Premier. She is not a Mac appointee. Further, she reports to the Legislative Assembly, not Cabinet. The OCC is an INDEPENDENT OFFICE and receives no direction from Government.

      2. The Complaints Commissioner can only investigate Government (including statutory authorities like the NPO), and that is exactly what she is doing. If you actually read the article the first paragraph says this is an "investigation by her office into the ability of the NPO to effectively investigate, charge and convict companies who are non-compliant with pension contributions as mandated under the law." She is not investigating delinquent employers because she has no mandate to do so. Yes, this may expose them in a way, but her focus is appropriately on the NPO.

      How can you say that this review is not welcome? People are breaking the law and the Government authority that has been set up to stop them doesn’t seem to be doing much about it. "Misickisation" would be to allow this to continue without the OCC stepping in and asking where is the accountability!