Officials aim to end collusion

| 31/05/2012

retirement-jar.png(CNS): It is not just employers that have been non-compliant when it comes to compulsory pensions for workers, government officials have said; employees have also colluded with employers over unlawful opt outs. The chair of the pensions board and the superintendent of pension both said that the culture of compliance around the new bill is also aimed at employees. One major employer on the island is currently under investigation for allowing senior employees to opt out of a pension and use the equivalent contributions to invest as they see fit, while other bosses are colluding with workers  in order to not give the five percent mandatory employer contribution at all.

Although many of the600 delinquent pension cases involve employers taking pension contributions from their workers' salaries then not paying that or the 5% employer share into a fund, other cases involve the support of staff in dodging the legal obligation to pay into a pension fund. Officials said Monday at a press briefing to announce the publication of a new draft pensions bill that some employers are getting staff to waive the requirement for the employer to pay 5% by refraining from collecting the worker’s share, ensuring the employee’s silence.

Other employers and employees are involved in more complex collusions, where the company is giving the 5% or even 10% contributions directly to employees and allowing the professionals to make investment decisions for themselves and opt out of the legal requirement, in contravention of the law.

Orren Merren, the chair of the National Pensions Board, acknowledged that a  leading employer on the island is currently under investigation by the pensions office regarding this type of collusion, and that there was an appeal before the board relating to this issue. However, he would not identify the employer since he said the matter was sub judice.

It was revealed at the press briefing that, going forward, the new Department of Labour and Pensions would be able to publicly name and shame those receiving fixed penalties for any breach of the law. Employers not responding to orders to pay once this law is passed won’t have their trade and business licence renewed, which in the case of the employer involved in this appeal could prove significant for the entire country.

It is not clear how many employers have allowed professionals to make their own pension arrangements, but in the case referred to by Merren, according to documentation seen by CNS, the high profile employer was ordered to pay the missing contributions, which went back many years, into a legitimate pension scheme.

Although this employer is believed to have paid the equivalent of the pension benefits to at least one employee, the cash was never paid into a locally registered fund. The investigation has lasted some two years but in June last year the pensions office concluded that the employer in question did not have a valid pension account for at least one employee. An order was issued butit is understood that no payments have yet been made in the specific case of one senior staff member as the employer has appealed the pensions office order and a special panel is expected to hear that appeal in the coming weeks.

With a number of professionals coming to Cayman that already have extensive investment portfolios in other jurisdictions, not all of them want to see the pension benefits, seen as a perk of the job in many cases, go to local pension funds. But Superintendent of Pensions Amy Wolliston said the new bill does not allow for any opt out under any individual circumstances.

Wolliston explained that the law does, however, make better provision for international pension plans to be registered in Cayman. In instances where global firms set up offices in Cayman, those companies would be allowed, under the law, to register their own pension fund, she said, provided it met local criteria allowing employees to continue paying into their company pension scheme. She noted that this was a separate situation from individual employees that simply wished to make their own investment arrangements.

“There is no opt out provision for individual employees to make contributions to pension funds or any other form of investment outside of those legally registered in Cayman,” she stated.

She also spoke of greater protection for workers that blow the whistle on employers who are asking employees to collude or who do not pay into funds. She said employers will not be able to dismiss staff members that report their bosses to the new department.

Officials have acknowledged however, that in many cases employersare only able to flout the law because of the willing support of employees. Merren added that an important element of the education campaign to create a greater culture of compliance will be to reach out to employees to encourage them not to collude with rogue employers.

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  1. Truth says:

    Caymans Mandatory Pensions plan.  Its where your retirement money goes to die.  think of it as your contribution to Caymans elite double dipper fund. Notice that no one is accountable or responsible for giving any of it back to you.    If you really had a choice would you do it?  Why?  O right, the Caymans (elite) leadership made it a law.  Wouldn't it be nice if they made it a law that you get back at least what you and your employer were forced to give up?  How about if  the Caymanian Government insured it?  Would you belive them enough to want to do it?  This is more like a Government sponsered pyramid scheme.  With the expected results.

  2. Anonymous says:

    To me pension funds these days are a classic ponzi. They need young people to come in to the pension fund just so they can afford to payout the retirees.
    if cayman gov wants us to mandatory contribute to a fund then they should Atleast ensure that is 1. The original capital invested is guaranteed to be returned us and 2. Fund managers don’t earn performance fees unless there is a specific performance % reached. This Will ensure that our money is not wittled away on the managers fees and Will make those managers work for Us. Those 2 provisions Will certainly make me more comfortable with putting 5% away each month but right now i do think when my retirement comes i Will be getting very little back.

  3. Kosher Nostra says:

    Sorry, but I'll take this in my own hands and will not pay into any registered pension fund for someone to  lose for me.  I'd prefer to handle this myself.  

    You know all this "enforecement" is reminding me of a Police state.  Government (as I used to work for them) had their own pension issues- leave the private sector alone until your system is fixed.  Lead by example!


    Rolston- I understand but do not support your hyposcrisy.

  4. Anonymous says:

    It is not only the masked gunmen that are robbing us so is that Mandatory Pension Plan.

    Sadly though it is all to do with  the way the Plan was put into action  it might have worked had it been mandated in the right way.

    Like always the Politicians rushs to pass these bills then when it is not working anymore they pass another bill  to try and fix it still doesn't work.

    It is discouraging to say the least to  see deductions every month from your pay and when you get your pension statement the very same money you have had deducted for the year has been wasted in bad investments and your pension value has been decreased.

    Pension contributions should be done on voluntary basis and we should be allowed to chose who we have our plan with.

    I suggest that amendment to the bill be that once a person have reached the age 55 they are entitled to take half of their pension funds. If they can't manage their affairs at that age when will they be able to do so.

    Let's hope the new bill isn't going to dig the grave deeper for us.

  5. Anon says:

    Why on God’s green earth are we wasting money ‘investigating’ what rich people do with their retirement funds?!?! Our they afraid these people are going to line up for Meals on Wheels?

    What a complete waste of public funds. There are people out here really suffering! Losing our homes! Can’t pay the CUC! No money for groceries!

    I could give a crap if some fat cat wants to invest their funds outside of the LOSER plan we little people have no choice but to live with. We shouldall be allowed to opt out. It is our money Big Brother.

    I would also like to know…How much of OUR money did Govt. spend (aka squander) to investigate some fricking attorneys’ pension investments?!

    • Anonymous says:

      I don’t particularly care about lawyers pensions, but am amazed we live in a jurisdiction that allows attorneys to openly breach the law.

  6. Anonymous says:

    You’re just assuming they’re really going to do something

  7. Anonymous says:

    The issue is about compliance with the law! 

    If you don't agree with participating in a pension, then there are procedures to follow to change laws…you don't get to pick and choose which laws to follow and which laws to break.  If the issue is investing the pension funds, there are procedures and choices for managing your funds.  Were you complaining when your pension fund was going up at a higher than expected rate? It's an asset…and all major assets have decreased in value…not just YOUR pension.  And, do you really want businesses that avoid compliance with the law? 

    Don't you want to know that YOUR government is actually allowing or covering up for some that are not following the laws for their own personal financial benefit? 

    Obviously there are numerous issues to be dealt with that apply to each individual…but while everyone is discussing their own personal issues…those that are not following the laws are busy finding more loopholes and avoiding compliance with the laws…not just with the pension law…it's called ethical, moral, and personal responsibiltiy…having the character to do the RIGHT thing.  Regardless of your own opinion on how to handle a pension, or whether or not you even want one has nothing to do with enforcing compliance.

    Hopefully there are still people out there with the capacity and desire to look past their bank accounts when making a choice or decision…instead of asking "what's in it for me?"

  8. Anonymous says:

    Pension Funds the world over have been the gravy train for incompetent, inept and unskilled  Investment Managers who lack adequate supervision and competency and who's misguided views on how best to invest such funds are driven solely by the amount of fees that these vultures can pick from these captive loads of cash.

    I would not invest in a pension fund in Cayman, or elsewhere, if the Government dragged me in chains to the Courts and then put me in Northward – whichcould be the most appropriate place to send some of the Investment Managers..

  9. Anonymous says:

    Those same Government Officials should hang their heads in shame in view of their own failure to address the matter of their contributions to the Public Sector Pension Scheme.

    Its not just the private sector companies that are in default!!!

  10. Anonymous says:

    The majority of the current players would have to be out of the way for this to work.

  11. Dreadlock Holmes says:

    It is MANDATORY that you pay into a pension plan that loses money? Of course. Do the pension administrators worry about the dismal returns?  Not at all because they extract their fee for "administrating", regardless of whether it loses money or not. Quite often workers find their statements show they have less in their account than their total contributions. But there isn't a thing they can do about it in order for themselves and their employer to remain in compliance. It was a nice idea – having mandatory pension plans – but it just plain doesn't work. It is not a means to saving your wages or ensuring some future savings when you have absolutely no control. It is like going to VEGAS. On that note it is no wonder some employers and employees have decided to choose a more practical and equitable method. There is a simple reason for this. Ordinary workers can not do what many politicians have decided to do. They have enacted their own set of rules for themselves whereby they can extract their pensions, while still working in government.  What kind of double standard is that? Why is that? Because they're not certain what will happen to their money. Or if it will be there. Unless that convenient loophole is addressed and everyone has to play by the same rules… this legislation enforces a double standard. It sucks.

    • Anonymous says:


      “Ordinary workers cannot do what many politicians have decided to do. They have enacted their own set of rules for themselves.

      This is so sad and it is so true.

      It is the breakdown of law and order in politicians, businesses and the civil servants that shows our young people – If the big man can do it then why not I?  The big business that owns government will get away with anything, just you wait and see, me and you, sister we gone to Northward.  That big business is too big to fail they say, so they can break the law and nothing will happen to them.

      Build more jails, go ahead, because unless the corruption in these Islands in brought under control then the respect for law and order will continue to diminish and our safety will be no more.






  12. Libertarian says:

    CNS:  "It was revealed at the press briefing that, going forward, the new Department of Labour and Pensions would be able to publicly name and shame those receiving fixed penalties for any breach of the law."  Cayman, prepare yourselves for businesses shutting down and leaving the island to find greener grass elsewhere. The rollover policy is already doing damage. The minimum wage law will do damage. And now this!  What happens when they leave?  Consequently, crime will increase and more people will be unemployed. Do you seriously think new investors will come here to replace the ones who left?  IT IS NOT THEM WHO WILL BE SHAMED!  RATHER IT IS WE THAT WILLL PUBLICLY SHAME OURSELVES!

    • Anon says:

      I very much doubt you'll find the big multi-national companies operating in Cayman to be in non-compliance. It is the local small business companies that don't pay their health premiums and pension contributions. These non-audited small businesses are the culprits so I don't see businesses leaving Cayman from this. Just MHO

      • Anonymous says:

        which makes it worse. if you own a small business and trying so hard to make ends meet, why the extra fines and harassment from government. i can see why we are having crime

      • Anonymous says:

        Them and the government, who apparently don't comply either.

    • Anon says:

      So true.

      Remember what happened at the Holiday Inn when the whole pensions fiasco kicked off?

      If you don't – the owners shut the place rather than pay the accrued arrears of contributions incurred by the new legislation.

      And to the poster below – it's not just the small local businesses failing to comply, lawyers and accountants are the best people on this planet to find ways round paying pension contributions but they are also very good at making sure they don't get caught.

  13. Knot S Smart says:

    It seems like our Govt is colluding with the pension funds and bringing harm to the hard working people of this country!

    Why does our Govt not investigate how much of our money has been lost by the pension funds in the past 20 years?

    Why dont they set guidelines of how much profit pension funds must make on an annual basis in order to remain compliant?

    Why dont these funds have to invest a percentage back into the Cayman economy instead of throwing it at the American stock market?

    How much profit have the pension funds gained in fees while they lost our capital?

    Please can we have a report showing how much was paid into each pension fund annually, and howmuch of those funds were lost, and how much fees the fund managers collected?

    Talk about collusion…


  14. Anonymous says:

    Its the poor small Caymanians at this time that cannot afford this losing pension scheme and our government is now going to ensure we lose our money. Help us with work and to take more money home, not have us put what little money we earn into some bank who then invests it overseas at a loss. Wake up government!

  15. Libertarian says:

    It is your RIGHT to opt-out!  You have worked hard to make a living for yourself and family!  You have shown independence in achieving your goals and contributing a service to your business and community!  You have followed well your rational self-interest!  Now, they are asking you to surrender that RIGHT so they can force you to pay into their pension scheme; and, worse – with no provisions of opting out!  There can be no justification or sugar coating for their actions and legislations against the free market of these islands. From way before the introduction of the Pension Law 1998, Cayman's economy was booming, and people were responsible for their own savings and retirement plans. Now, employees are at serious risk from a monster government that may just before their retirements, make so many dips and double dips into the pension pool that what savings will they have?  Be very wary Cayman!  Don't let politicians in sheeps clothing take what you have worked so hard for. 

    • TennisAce says:

      This is just absolutely ridiculous.  I have been working here for 10 years and during that time I have seen the value of my pension contributions decline every single quarter.  When I enquired as to whether I can transfer my pension contributions to my own retirement savings plan I am being told that this is not an option.  Someone needs to file an application for judicial review because surely this is unconstitutional.  If I can prove that I can better invest my money elsewhere why should I have to invest in a pension fund that is losing money. 

      In addition to that, why do expats have to wait almost 2 years before they can recover their pension contributions? This whole pension thing is just ridiculous because the only entity that is benefitting from this is the government that cannot even seem to balance its own darned budget.   

      • Anonymous says:

        I worked in the us and have to wait untill i am 65 to get my pension,what make expats so special here?.

        Be carefull crook.

    • Socialista says:

      The pension is to guarantee a livelihood to every man and woman that has retired from their services to the community. It is contributing back to those who have helped you climb the ladder of success. That is only fair. You are responsible for your fellow men.

      • The Thinker says:

         What do you mean, "You are responsible for your fellow man."?  I am not responsible for what everyone else does!  Do you think I should be responsible for the ones who don't save for the future?  How about the drunks….. am I responsible for them?  Maybe you want me to be responsible for the thieves, robbers, and other criminals.  I say NO!  I am NOT responsible for my "fellow man"!  The responsibility lies on an individual to care for himself and his family, not all the ne'er-do-wells.  If an individual doesn't put something away for the future it is his own fault.  If a company has a pension plan for its employees, that's fine…. a lot of them would have such plans WITHOUT government interference.  Government shouldn't make you care for yourself.  If you don't….. well…. you just have to suffer the consequences.  For my part THE GOVERNMENT CAN STAY OUT OF MY PERSONAL LIFE, INCLUDING FINANCES!  A good government should have means of caring for those who are unable to care for themselves, not people who refuse to do so.

        Socialista, you are indeed a dyed-in-the-wool socialist.

        • Socialista says:

          You are not in this world alone!  Do you seriously think you can make it on your own without the help of somebody else?  Those 1000 companies that are stealing pension funds from employees are denying this basic reality.  We are all connected. You and Libertarian are trying to make us look like we are not…. that we are selfish people, people that can't work together and look out for themselves. Ever heard of united we stand, divided we fall?  What will happen if those who are wealthy look out for themselves and hoard the wealth and it is withheld from low income people?  Do the math and it will show you why there needs to be a pension law enforced to look out for the elderly and those who served us well.

          • The Thinker says:

            I like your reply, Socialista.  It's true we are not in this world alone, and I am in favor of pension plans……. just not ones forced on us by a heavy-handed government.  As a rule, a company or business offering a pension plan will get more people applying for jobs and they will have less job turnover than non-plan businesses.  I worked for a company for many years that had a pretty good retirement plan.  It was not mandated by government.  Some places I worked had no retirement plan.  I tried to save for my retirement and did a fair job of it.  I'm a long way from being rich but I don't worry about being hungry.  You mentioned the rich hoarding their wealth and keeping it from the low income people.  Most all of them do try to hang onto their wealth….. Who wantsto go broke?  I don't put them down for that.  Keep in mind that some very rich people give aid in many ways to the less-fortunate, not because they are forced but because they are caring people.
            Please note that I did say that a government should care for peoplewho cannot care for themselves.   I guess we will just have to agree to disagree on our current government's forced pension plan.

      • Libertarian says:

        Ask yourself the question, who says you are responsible?  A parent is responsible for taking care of a child. But an adult?!  They should be responsible for themselves. You don't need government to take care of your economic needs when you are able to work and sharpen yourself. The moralityI uphold is a rational one. It is not based on whim, faith, or a religious belief – but on one's life as the standard of value to whatever decisions that one makes.  

        • Anonymous says:

          Doesn't taking responsibility for yourself include complying with the laws and rules?

          • Anonymous says:

            Excuse me…. there are stupid laws and rules that are not in our best interest. 

  16. Anonymous says:

    UNBELIEVABLE!!  Another governement mandated clusterf***k.  We don't want individuals to be able to make their own decisions with their own money.  We here at the CIG are so knowlegeable and competant with money, just at look at how well our finances are, oh wait a minute.

     I've been paying into my governement mandated pension fund since the law was enacted.  As of this last statement, it has $162 less then the total contributions made over the years.  If I had used it to pay down the principal of my mortgage, that would be a guaranteed, zero risk, return of my mortgage rate compounded over the term of the mortgage.  Or I could have bought gold a couple years ago and over doubled my money.  But because these bafoons at the government know better than me I might as well have been sticking it under my mattress letting inlation eat away at it.  Thank you CIG, you guys are great.  How about you get your own house in order before you start dictating what I can do with my money.

    At the very least, the Cayaman registered pension funds administrators should only be compensated on the return of the fund, i.e. when I don't make any  money neither do you. And  the money they make has to be reinvested back into the same fund  for at least one year.  Now were all in the same boat.

  17. Anonymous says:

    It is not collusion. It seems to have become a recent political norm – and yes I am Caymanian. We now have a government that has run up a huge pension liability by failing to make the required contributions, prefering to spend money on luxury travel and vote buying and other questionable practices. We have political leaders that ignore the rules whenever they want.

    This media blitz is just posturing. If the politicians were serious they would clean up their own mess first and lead by example.

    • Anonymous says:

      "…lead by example…"


      It seems that the Premier and the Minister of Education are doing exactly that.


      Cayman needs a new generation of educated, competant, and ethical Caymanian politicians. They do exist but are not stepping up to the plate.

  18. three monkeys says:

    Why not first prove that putting money into the Caymanian pension fund will result in a savings versus loss on money before you make it a law to do so?  We put in,  our employer put in, we left and waited 3 years and got back less then what we put in.(Minus what our employer put in) and nothing more.  This makes it a law that the pension fund can steal from us and our employer.  Like most things in Cayman it does not work.   Except for a few at the top.

  19. Anonymous says:

    Cayman islands is on a verge of collapse…lets face it….now they are so worried about the pension plan???? Everywhere in the world investing of money is losing, why is it only here they are forcing a person (employee and employer) alike to invest their money when they barely can make ends meet in this present economy.


    Our crime is out of control, we have one minster charged and arrested and another under investigation, people losing homes, I think the priorities need to change

    • Anonymous says:

      In the US you would go to jail if you dont obey the law no matter how foolish it is.