Archive for October 9th, 2013
Pension delinquency up 70%
(CNS): Three years after completing a report on the appalling state of pension delinquency in the private sector, with employers either not able or not willing to pay contributions as required by law, the complaints commissioner revealed that things are now even worse. Nicola Williams said that she found that 670 employers were failing in their pension obligations in 2010 and made some 21 recommendations to government about improvingcompliance. Since then, the number of delinquent bosses had increased by 70%, with tens of millions of dollars now missing from pension funds. Williams warned of dire future consequences when workers retire and that she would be reporting those who have failed to pay to the attorney general.
Speaking to the media Wednesday after releasing a statement about the increase in non-compliance, the complaints commissioner said that while she could not state for confidentially reasons the global sum of money missing from employees' plans, she said it was in the tens of millions of dollars. Although Williams avoided the calculations directly, she acknowledged that the 70% increase in delinquent business meant that more than 1,100 employers were now not meeting their obligations under the law.
Describing the issue as a “national crisis”, Williams said the delinquency was across the board, from large professional service firms to small mom and pop operations, which was impacting both local Caymanian workers as well as ex-pat permit holders.
Surprised that government had addressed less than half of her recommendations over the three years since the report, she said that she would now be taking the information she had to the attorney general. She pointed out that these employers were deliberately breaking the law when they not only failed to pay their 5% share of an employee contributions but were taking the other 5% from their workers’ pay packets and not placing it into the pensions. Williams explained that her office can only investigate the government entities meant to be supervising the system, such as the department of labour and pensions and the pensions board in this case, and not the actual business involved.
She said it was unacceptable after three years that the levels of compliance were worse and that government had followed only half of her office's recommendations. Although the previous administration had said the new law would deal with seven of the remaining eleven recommendations, the revised pensions legislation was never passed and the new government has not yet indicated what its position will be.
Given the disgraceful state of affairs, the only thing the commissioner said she could do was to try and force government’s hand to address the problem by exposing the shortcomings of the relevant agencies to the wider public in an effort to put some pressure on those who are in a position of responsibility and who could take action to rectify the situation.
“Paying a pension is a legal obligation not an optional extra,” the commissioner said, as she pointed out that the failure of the rogue employers to meet their obligations to their staff would have an impact on workers whose bosses were paying as it would strip the funds they are in of cash and undermine its growth potential.
On 29 January 2010 Williams launched the Own Motion Investigation into the problem of poor pension compliance.
She found that every month working men and women had funds deducted from their pay cheques thinking that the cash was going to a pension plan, “only to discover that it was used in some other way or, in some cases, stolen from them by dishonest employers who never had any intention of paying it into a pension fund as required by law,” Williams said in her statement.
The report came out in September 2010 detailing the high level of delinquency, but since then delinquent businesses have increased by 70.7%, amounting to tens of millions of dollars, and employers put on payment plans to clear their pension arrears are delinquent on these plans as well, also amounting to millions of dollars.
“This is a national crisis which should concern all of us, as many people about to retire will find that they have insufficient funds on which to live, and will have to rely on social services or other financial relief provided by the government, which are already stretched to breaking point,” Williams said in her statement. “This is not only a problem for the department of labour and pensions, but for the ministry, and government as a whole.”
The commissioner added that as long as her recommendations remained outstanding the ministry was non-compliant, and as a result of government’s failure to revise the legislation over the last three years, the commissioner was not optimistic that the new administration was likely to bring a revamped law anytime soon.
“Meanwhile the situation is worsening, as every week people who have worked all their lives and had pensions deductions made for decades are retiring into unexpected and unplanned poverty,” she warned.
CNS has contacted the relevant government agencies and is awaiting their response.
See Williams’ full statement and a copy of the original report below.
$2.8M missing in PR fees
(CNS): The chief officer from the Home Affairs Ministry has said that government is owed around $2.8 milllion from permanent residents who have not paid their annual fees. At a meeting in West Bay Tuesday night (8 October) Eric Bush revealed the hole in the public purse as he explained government’s planned immigration reform. He said that under the proposed changes permanent residents who do not pay their annual PR fees could find their residency rights revoked. The new regime will require applicants for PR to pay their first annual fee plus all the administrative application costs, which have increased, and any dependency fees up front at the point of application to deter frivolous claims.
Explaining the changes and the much more stringent system that the new government plans to introduce once the Immigration Amendment bill is passed, Bush said that in future permanent residents will be required to submit an annual truthful declaration in respect to their investments, employment and other factors when they pay their annual fee. Failure to comply or to withhold or give false information will be an offence leading to the loss of their PR. The right to residency could also be taken away if the person moves to an occupation that is not authorized in his certificate.
In light of the controversies that have arisen since government announced the major overhaul to one of the Cayman Islands’ most revised piece of legislation in modern times, Premier Alden McLaughlin, who was hosting the public meeting, said he was aware of the “concerns and misunderstanding” in the community. He told the audience of more than one hundred West Bayers, which included Opposition Leader McKeeva Bush, that he was keen for people to understand what was being proposed.
McLaughlin emphasised that there were lots of work place initiatives being implemented in parallel with immigration changes that would help Caymanians get back to work, as well as efforts to get the economy moving again. He said that government had worked hard to inspire business to invest and grow jobs, and with the return of commercial confidence after it had been seriously undermined, things would improve.
Immigration, he said, was a separate element from unemployment, but when half the country’s workforce comes from somewhere else, Cayman needed a system that works properly to protect Caymanians and give employers access to work permits when they are genuinely needed.
Ahead of the chief officer’s presentation detailing the changes, McLaughlin spoke of the weaknesses in the currentsystem and pointed to the lack of enforcement and abuse. Going forward, thirteen more officers were earmarked for the department and at least five of them would be compliance officers, charged with monitoring the law and for the first time ensuring that the details presented in work permit applications were accurate and realistic
“The system has been abused badly,” the premier stated and pointed to the unintended consequences of the key employee barrier and seven year rollover. This had led to a drop off in investment in property because the majority of people on work permits were aware they would never get a chance to apply for PR, so instead of investing here they sent money back home.
McLaughlin said that by treating everyone the same and allowing them all to stay and try their hand at PR it was hoped that there would be more direct investment in the economy as people worked towards reaching the PR criteria and collecting enough points to stay.
As a result of the changes some 1,500 term limit exemption permit holders will now get the chance to stay on and apply for PR. It was revealed at the meeting that around 250 of those will be eligible immediately and they will need to make applications under the much stricter regime straight away or they will be required to depart. If their application is refused, which officials believe will be the case for most of them, they will also be required to leave at the point of their application being declined. Under the new regime appeals will be filed from overseas as appellants will no longer be required to appear in person.
Following the presentation of the proposed changes, the response was mixed but many West Bayers seemed more optimistic about the changes when they realized how much more difficult it would be in future for most ex-pats to get through the PR application process.
However, many had concerns about existing residents who should never have got through the barrier in the first place. It was clear that the attendees wanted to see government revoke the PR rights of every one of the delinquent fee payers.
Most of the concerns from the floor after the presentation centred on the problems Caymanians have getting work and the abuse they face, with employers bending the law to avoid taking on locals and treating Caymanians “as second class citizens”, one local stated.
The plight of returning graduates was highlighted as a particular problem, as the perception is that many human resource managers are ex-pats who refuse to engage local graduates on the basis that they have no experience. With no one willing to give that experience to them, however, they are making up a significant percentage of the unemployed locals.
One West Bayer who had been part of a planned protest against the bill, which is understood to now be cancelled, said that he was comforted by what he had heard. But, he said, the premier should have consulted the grass roots and explained the aims about the amendments before putting out the bill. McLaughlin conceded that this was good advice that would be heeded.
As he rounded up the meeting the premier emphasised that the main goal was to ensure those who got PR were immersed in the community and had the wherewithal to take care of themselves, as many that already had residency rights were not able to do so and had now become a burden on the public purse.
The new process would “take out the subjectivity of the board”, he said. “We looked at systems across the world and nowhere do boards with personal knowledge of the applicants choose the people who will receive residency rights.”
McLaughlin pointed to the fundamental issue when he added, “Unless we decide that the only people who can become Caymanian are those born to Caymanian parents, we have to create a system that allows people to stay and become integrated. This may not be perfect but we believe it is a major improvement,” hesaid.
The next immigration public meeting will be in George Town on Thursday evening at Elmslie United Church.
See the full presentation below on the reform bill below.
Rugby festival raises cash for reading
(CRFU): The inaugural Genesis Trust Touch Festival was a huge success at the Camana Bay Sports Complex with twelve teams taking part in a fun day for friends and families alike. This tournament was designed as a way of having fun, playing a sport the participants love, but also to raise funds for a worthy cause at the same time – L.I.F.E. Ltd. (Literacy Is For Everyone) – a local charitable organisation aimed to improve literacy levels in the Cayman Islands. With an emphasis on the lighter side of sporting life, extra points were awarded to players who had not really played the sport before and teams were encouraged to play in fancy dress.
Parents could play with their kids who were often far betterthan some of their grown-up counterparts, and for those that did not want to play with the adults had their own matches. Cayman Physiotherapy were also on hand to relive any aching muscles for the elder players!
Each team made a great effort with their costumes and the marvellous Carey Olsen team, resplendent in funny wigs and glasses, made quite a display and won the Best Dressed Team award.
As far as the Touch itself went, it was the all-conquering Maples team that narrowly beat the Broadhurst team in a gripping Cup Final. The Security Centre Stingrays won the Plate, and Delta took the Bowl competition. Of course the real winner was L.I.F.E. Ltd. This charitable organisation empowers parents to help their children read, and facilitates paired-reading programs to assist students. In total just over US$1,500 was raised for LIFE and Genesis Trust generously increased this donation to US$5,000, which will cover the cost of running the Leveled Literacy Intervention programme (a supplementary literacy intervention programme giving intensive instruction for students who are struggling to achieve their grade reading level) at one local school.
The other beneficiary was the Cayman Pirates Touch Team, who helped run the tournament and were raising funds for their trip to the US Touch National Championships.
A spokesperson for Genesis Trust said: "The Genesis Trust Touch Festival was a huge success as we were able to raise money for a great charity, promote the game of Touch and above all have a fun day out that was enjoyed by the whole family. Thank you to all the sponsors, volunteers and players that contributed to making it such a great event."