Pension Holiday in Part Over
The temporary one-year suspension of pension contributions for Caymanians comes to an end on Tuesday, 26 April. However, the 'pension holiday' period for non-Caymanians will continue for an additional year.
Amendments to the National Pensions Law, allowing Caymanians a temporary one-year suspension of pension contributions and a temporary two-year suspension period for non-nationals went into effect on Monday, 26 April 2010.
The amendment affected private sector employers, employees, and self-employed individuals, and required voluntary participation for the permitted timeframe. It was initially implemented to ease financial burdens fuelled by the worldwide economic recession and to stimulate the Caymanian economy.
"With the expiry of the suspension, participating Caymanian employees can expect to see their employer's resumption of salary pension deductions along with the payment of these contributions to their relevant pension plans," Superintendent of Pensions Amy Wolliston explained.
As a reminder to employers she also noted that Caymanians are pensionable immediately. They are required to participate in a pension plan and pay pension contributions, from their first day of employment.
Minister with responsibility for pensions, the Hon. Rolston Anglin, JP, added, "These contributions are extremely important to continue each employee's long-term savings for retirement. It's a critical part of their retirement planning."
For details on the suspension, refer to the National Pensions Law (2010 Revision). A copy is available on the Cayman Islands Government web portal www.gov.ky, under the features section. Individuals may also contact their pension plan or the National Pensions Office on 945-8960 with questions.
For further information contact: Kenisha Morgan
Published 30th July 2010, 5:41pm
Amendments to the National Pensions Law, allowing a temporary one-year suspension of pension contributions for Caymanians and a temporary two-year suspension period for non-Caymanians, takes effect Monday, 26 April.
This amendment will affect private sector employers, employees, and self-employed individuals.
Explaining the rational for the suspension, Minister with responsibility for pensions, the Hon. Rolston Anglin, JP, said "In the current economic climate, pension contributions place a considerable financial burden on employers, employees and self-employed persons.
"With some businesses facing closure, this relief might enable them to survive these tough economic times."
To participate in the suspension Minister Anglin explained that businesses must be in compliance with the National Pensions Law.
"Any employer participating in the suspension term must be up-to-date with their contributions or have made arrangements for the payment of any arrears before participation can begin," he said.
"This is to avoid compounding any existing non-compliance with the National Pensions Law."
Acting Superintendent of Pensions Amy Wolliston noted that while participation is voluntary it is not automatic.
"Persons who wish to continue making contributions throughout the one- or two-year term may continue to do so," she said, "But employers and employees must apply to participate."
She explained that both parties must first agree to the suspension, then sign a written agreement that replaces employment-contract pension obligations. Once those steps are completed a formal application must be made to the pension plan adminstrator, which must approve the suspension before companies can cease making contributions.
Another participatory condition she noted is that pension plan membership must be maintained. That is, all employers and employees - regardless of when they are employed - must be members of a registered pension plan. In fact, businesses established during the pension holiday period are also obligated to establish a pension plan and ensure that their employees are members.
Similarly, opportunities to suspend pension payments are extended to self-employed persons. However the same conditions apply. Self-employed individuals must formally apply to their pension plan administrator before suspending payments, and must maintain their membership within a pension plan.
For more information, refer to the National Pensions Law (2010 Revision). A copy is available on the Cayman Islands Government web portal www.gov.ky. Look for it under the features section.
Pension Suspension Application Procedure
To participate in the pension suspension employers must:
- Ensure that all pension contributions are current. If they are not, then a payment plan must be agreed with the pension plan administrator to reduce outstanding contributions.
- Find out which employees wish to voluntarily participate in the pension holiday.
- Ensure that written agreements, which supersede/replace employment-contract pension obligations, are signed by each participating employee and the employer. (Agreement-templates are available from pension plan administrators.)
- Apply to the pension plan administrator for approval by submitting:
Note: Standardised forms will be available from each pension plan.
Maintain the pension plan membership of all employees.
- the standardised application along with proof of nationality; and
- the written employer and employee agreement.
Individuals employed during the suspension period must also be registered with a pension plan.
Self-employed individuals must:
Source: Ministry of Education, Training and Employment.
- Ensure that you are current with all pension contributions if not, then develop a payment plan with the pension administrator to reduce outstanding contributions.
- Formally apply to your pension administrator to temporarily suspend pension contributions.
- Maintain your pension plan membership.
Published 17th September 2009, 2:40pm
In addition to the recent appointment of controllers to manage the affairs of British American Insurance Company (BAICO) by the Cayman Islands Monetary Authority (CIMA), the National Pensions Office has also taken action under the National Pensions Law (2000 Revision) to seek to protect pension assets administered by BAICO.
This action requires BAICO to provide important information, which is necessary for the National Pensions Office to properly regulate the registered multi-employer pension plan operated by BAICO in the Cayman Islands, within 30 days. The action takes the form on an Order, as provided by section 70 of the National Pensions Law (2000 Revision), and has become necessary as a result of the repeated failures of BAICO to provide this information when previously requested.
The Order requires BAICO to provide the National Pensions Office with their now overdue audited financial statements, their annual information return and a detailed report of all contributions received by the pension plan from inception to the end of September 2009.
The Superintendent's Order, which was served on BAICO on the 15th September 2009, has also been filed in Grand Court. This means that it carries the weight of an order of the Court and is enforceable as such. The National Pensions Office is working closely with CIMA in an effort to best protect these pension assets and the Acting Superintendent of Pensions has already met with the BAICO Controller to emphasise the importance of the information requested. The National Pensions Board has been briefed by the Acting Superintendent and together the Acting Superintendent and the National Pensions Board are closely monitoring the situation in order to assess whether additional action is necessary under the National Pensions Law (2000 Revision) to protect pension assets.
While BAICO is not presently allowed to engage new business, following the issuance of a cease and desist order by CIMA on the 29th June 2009, BAICO is permitted to continue to receive pension contributions from existing members of its registered pension plan. If employers or employees are considering alternative pension arrangements, there are options available to them. There are five other multi-employer pension plans operating in the Cayman Islands, all of which are registered with the National Pensions Office. Information on registered multi-employer pension plans in the Cayman Islands may be obtained from the National Pensions Office's web-site at www.npo.gov.ky, or by calling the Office on 945-8960.
Published 18th April 2008, 4:5pm
In an effort to obtain full compliance with the provisions of the National Pensions Law and its associated Regulations, which govern private sector pensions in the Cayman Islands, the National Pensions Office (NPO) in conjunction with the National Pensions Board (NPB) has been working with employers and pension administrators to ensure that they fully understand the extent of their legal obligations.
One important outcome of this dialogue has been the need to remind employers that Pensions Regulations require them to submit all contributions to the chosen fund by the 15th day of the month immediately following the month in which they fell due. That means that April’s payments must be received by the 15th May. In law, late payments are subject to interest charges (of prime rate + five percent (5%)), so it is also useful for employers to understand that their fund administrators do not hold any authority to permit these deadlines to slide or waive interest charges due.
At the most fundamental level of the law, all employers in the Cayman Islands are required to contribute to a registered pension plan on behalf of all their eligible employees. These contributions must total not less than ten percent (10%) of the employee’s earning, and will be comprised of a minimum contribution from the employer of 5%, and a maximum contribution from the employee of 5%. The National Pensions Board, which together with the National Pensions Office is responsible for administering the Law and Regulations, is established by the National Pensions Law (2000 Revision) and is appointed by the Governor.
Bryan Bothwell, Chairman of the National Pensions Board explains, “The regular payment of pension contributions, as provided for in law, is a mandatory condition of employment in the Cayman Islands. We want to ensure that employers and employees fully understand that paying pension contributions is not a voluntarily measure they can opt out of, or choose not to do.”
Mr. Cyril Theriault, Superintendent of Pensions at Cayman’s National Pensions Office (NPO) says, “Fund administrators have recently been reminded of their strict obligations to enforce these rules, so it is important that employers know where they stand in the law. Funds must actually be with the plan by the cut-off date. Cheques submitted on-time but stating a due date for payment beyond the 15th, are not in compliance with the law and will incur interest charges for the employer.”
Mr. Bothwell says that, “Some employers are still not paying into their funds within the time provided for by law, even if they have made deductions from employees’ salaries. The interest fees charged to employers for late payment go towards compensating employees for any loss of investment earnings on their contributions due, which have not reached the fund. It is critical then that administrators and employers work together to ensure that contributions are received on time, and that interest charges are properly collected.” He added, “Employees themselves can also help protect themselves by cross-checking pension-plan statements with payslips to ensure that their earnings have been properly deducted and the correct contributions made to their fund.”
Help is at hand for administrators, employers and employees, who feel that they are not sufficiently familiar with the provisions of Cayman’s National Pensions Law. The website of the National Pensions Office is an easily accessible and comprehensive resource for information pertaining to the roles of all affected parties and their responsibilities, as well as copies of laws and Regulations, and information on the authorities which enforce them. The NPO website is at www.npo.gov.ky. Visitors to the website can also learn about limits on pensionable-earnings and contributions, how commissions and gratuities are treated by the law, employee eligibility and the rules pertaining to the self-employed.
Mr. Theriault explains that, “Historically, breaches of the law create a significant burden on the authorities which enforce it, in particular the National Pensions Office and the pension providers, who are responsible for ensuring that delinquent companies are compliant.” He added, “There are currently a number of companies who are in arrears with their pension payments and the NPO is making stringent efforts to ensure that employees obtain all monies due to them. However, we would much rather reduce this number of delinquent companies by ensuring that all employers are fully informed about, and compliant with, their obligations before they are in breach, rather than through time-consuming investigations afterwards.” Mr. Theriault points out that, “There is no shortage of good examples to follow in the Cayman Islands, with the number of companies keeping-up with their contributions being vast in comparison to a small minority who do not.” He adds, “That said, it is important also to remember that any failure to pass on the full amount of an employee’s pension contributions will have a negative impact on the ultimate pension received, which is why we must seek to ensure compliance in every single case.”
Published 12th December 2006, 12:12pm
Following the Pensions Office's first successful prosecution of an employer for non-compliance, employers are advised to ensure that they fulfil their obligations to provide pension plans for their employees under the Cayman Islands National Pensions Law (NPL).
This week, the National Pensions Office (NPO) gained a summary conviction against an employer who failed to meet the legal pensions obligations for staff, and who furthermore failed to comply with the NPO's repeated requests for information. In this particular case the defendant was levied a fine of $2,600, payable within the week, and on default of the payment, to serve 2 months in prison.
After receiving a complaint of non-compliance on 22 April, 2003 against Edward Steve McLaughlin (operating as Caristef Construction and Heavy Equipment), the NPO sent letters to the company requesting the relevant information.
However, these letters, as well as follow-up investigations, telephone calls, faxes and other communications over a one-year period, were met with negative results. A court summons, and several months of expensive and time-consuming court appearances, then followed.
"We are pleased that the courts have looked at failure to comply with the NPL as a serious violation," said Cayman Islands' Superintendent of Pensions Cyril Theriault. "We encourage all employers and employees in these Islands to ensure that they meet their pension responsibilities."
He added that even after conviction, if non-compliance continues, further litigation could occur, which may lead to increased fines or a prison sentence.
The National Pensions Office, with a staff of seven, including three inspectors, monitors and enforces the provision of pension services to all private-sector employees in the Cayman Islands, amounting to in excess of 25,000 pension accounts.
When non-compliance is reported to the NPO, or when the NPO becomes aware that a company is not providing a retirement savings plan, the office will request that the employer complete a questionnaire to explain the situation. The questionnaire addresses such areas as the number of employees; the name of the company's pension plan; the pension provider; and details of recent financial contributions.
Section 82 of the Law provides that the information be provided within the time limit set out in the request. This is so the office can ascertain compliance with the law and the regulations. Failure to comply with such a request is subject to a fine, on summary conviction, of $1,000.
Upon receipt of the requested information, the NPO will work with cooperative companies to resolve the situation in the best manner possible. "If there is no plan, or if all the required contributions have not been made to the plan, we will try to work out a payment plan with the employer," added Mr Theriault.
"This payment plan would require the timely payment of current contributions and a schedule for paying any arrears owing, in a timely manner."
Failure to reach an agreement and to follow its terms and conditions will result in further charges being laid under the NPL. These carry fines much greater than failure to provide information, ranging from $5,000 to $10,000 on each charge and possible additional fines of $500 a day for each day that the required pension payments are not made.
More information on employers' and employees' pensions responsibilities is available from the NPO or National Pensions Office.
Published 29th May 2006, 2:59pm
The first-ever visit to the Sister Islands by National Pensions Office (NPO) officials will help employers and employees to understand their responsibilities under the Pensions Law.
Pensions Superintendent Cyril Theriault, accompanied by Pensions Inspector Pierre Lautischer, will visit Cayman Brac on 8 and 9 June.
As the regulatory body with respect to private pension plans in the Cayman Islands, the National Pensions Office exists to ensure the effective and efficient administration, implementation and evolution of the National Pensions Law and Regulations.
Mr Theriault said the NPO's visit is an opportunity for employers and employees to have private meetings about the National Pensions Law. It also will allow NPO officials to meet with a few employers whose employees have lodged complaints, as well as employers who have refused to acknowledge correspondence issued by the Pensions Office.
Sister Islands District Commissioner Kenny Ryan said he welcomes the visit, which 'is timely and will be useful in informing all sectors of the community of their pension obligations'. While not excessive, and while no cases are currently the subject of court action, there is some noncompliance among Brac employers in regard to pensions, said Mr. Theriault.
During the two-day visit, the NPO visitors will be based at the District Administration Building's conference room. They will begin with a general presentation for the general public, and subsequently offer private meetings. The itinerary for the NPO's visit is as follows.
- Thursday, 8 June (10 a.m. to 12 noon):
- NPO informational presentation on the National Pensions Law, highlighting employers' and employees' responsibilities. All members of the public are invited to attend.
- Thursday, (2pm-5pm):
- Scheduled appointments and interviews with employees and employers.
- Friday, 9 June (9am-5pm):
- Individual scheduled appointments.
Future Sister Islands visits by the NPO, including a visit to Little Cayman, will take place based on the demand for its services, Mr Theriault said.
Employers or employees interested in arranging individual appointments for the Brac visits should call the NPO at 945-8960, or by e-mailing email@example.com.
Published 16th February 2006, 2:0pm
Government Pensions Inspector Pierre Lautischer has added the title of Certified Forensic Interviewer (CFI) to his qualifications, having recently passed the requisite examinations.
Superintendent of Pensions Cyril Theriault applauded Mr. Lautischer's achievement. He noted that this qualification will improve the National Pensions Office's service to its users, in the provision of neutral and comprehensive analysis of claims and complaints.
The National Pensions Office (NPO) together with the National Pensions Board is charged via the National Pensions Law with:
- Administering the Law and regulations (including daily contact with employees, employers and plan administrators);
- Promoting the establishment, extension and improvement of pension plans throughout the Islands;
- Advising the Minister in respect of the business of the Board (and the office); and
- Making recommendations to the Minister in respect of pension plans.
A certified forensic interviewer is a professional with expertise in interviewing victims, witnesses, suspects, or other sources to determine facts regarding suspicions or allegations of specific incidents. The role of the CFI dictates that the post holder understands legal aspects of interviewing and is proficient in interview preparation, behavioural analysis, documentation and presentation of findings.
Ongoing education and training is integral to the operations of the National Pensions Office. Following a six-month study period, Mr. Lautischer completed a 160-question exam on interview and interrogation processes.
Mr. Lautischer was also certified last year as an "Inspector General," after training at the Certified Inspectors General Institute at the John Jay College of Criminal Justice in New York. The audit and inspection duties of this role include evaluating and reviewing worker savings programmes, with detailed scrutiny of specific areas such as staff qualifications, due professional care, timeliness, fraud, risk management and internal management controls.
His responsibilities with the NPO include identifying and documenting, in conjunction with the Superintendent and Deputy Superintendent, the functions of pension inspectors, creating procedural forms to be used in inspections and prosecutions of pension cases, as well as producing a policy and procedural manual for inspectors. He will be joined by an additional Pension Inspector shortly.
Published 10th January 2006, 12:26pm
Workers and employers may now access in-depth general information on their national pension plans by logging on to the National Pension Office's (NPO) newly-created website: www.npo.gov.ky or www.gov.ky/npo.
Clients may also use this new facility to communicate with the office and clarify any questions or issues regarding their retirement savings.
The site, which is streamlined and easy to navigate, may also be found as a link on the official national website www.gov.ky under the Government Websites Directory, and speed-search under the letter 'N'.
Speaking of the project, which became a reality only after several setbacks, Superintendent of Pensions, Cyril Theriault said, "This site was envisaged pre-Ivan as an important communication and educational tool. We believe that the final product is very crisp and clean."
Packed with information, the 'Employees' section of the website offers facts on eligibility for participation, changing plans, refunds, as well as other vital data. Another section details 'Employers' Responsibilities,' in addition to providing listings of the four major national certified multi-employer plans, as well as two plans vying for registration (and links to their web-sites where available); and an in-depth 'Administrators' section which includes the National Pension Law, various regulations, as well as meeting reports.
The site also contains the membership of the National Pensions Board, definitions of key words, and answers some frequently-asked questions. Blank forms are also available on the site, as well as an employer survey form, press releases and public information.
While most workers in the Cayman Islands are covered under the six major multi-employer plans, there are in excess of 165 local pension plans registered with the NPO. Total membership is 25- to 30,000 people, including those who have left the Islands within the last two years, and those who have more than one pension plan.
Noting that the site will continue to evolve to meet identified needs, Mr. Theriault added, "We hope to add more information to the Administrator's section in the form of Guidance and Administrative notes and have already canvassed the pension community and the Board to see what their priorities will be. Forms will be added as they are revised".
Mr. Theriault expressed appreciation to the work of Pensions Inspector Pierre Lautischer, who coordinated the website project. He also congratulated the site developers, government's Computer Services Department: "They did a very good job for us and in a timely manner. We wanted it prior to the start of the New Year and they delivered," he said.
Coinciding with the website launch, the NPO also unveiled their new logo, another Computer Services design.
Published 2nd September 2005, 12:0pm
The National Pensions Office now has Cayman's first certified Inspector General on staff, following the successful completion of training for this distinction by local Pensions Inspector Pierre Lautischer.
Although the post of Inspector General in the National Pensions Office has yet to be created locally, Mr. Lautischer’s accomplishment is commended by the Minister responsible for Employment, the Hon. Alden McLaughlin and by the Superintendent of Pensions, Cyril Theriault. Extending his congratulations to the officer, Mr. McLaughlin said: "This impressive new certification enhances the status of our pensions service, as well as the links with international associations. It also serves to demonstrate the National Pensions Office's high level of commitment to its responsibilities."
Last month Mr. Lautischer attended the requisite training at the Certified Inspectors General Institute at the College of Criminal Justice in New York. There, the Cayman Islands' delegate joined colleagues from other jurisdictions who were seeking, or contributing to, similar accreditation.
Since joining the Pensions Office last year, his responsibilities have included identifying the functions of pension inspectors, creating procedural forms to be used in inspections and prosecutions, as well as producing a policy and procedural manual for inspectors. Prior to becoming the first local Pensions Inspector and completing certification as a Fraud Examiner, Mr. Lautischer previously served as a RCIPS officer.
He noted that the audit and inspection roles of an Inspector General entail the evaluation and review of systems, with detailed scrutiny of specific areas such as staff qualifications, due professional care, timeliness, fraud, risk management and internal management controls.
Historically, the role of the Inspector General dates back to 1668, when the military identified the need for accountability. The international Association of Inspectors General (AIG) developed the industry standards - known commonly as the 'Green Book.'