Rivers steers through imperfect pension bill

| 05/05/2016 | 80 Comments
Cayman News Service

Tara Rivers, Minister of Education, Employment and Gender Affairs

(CNS): The employment minister managed to steer through what she admitted was a less than perfect amendment bill that makes more than fifty changes to the pensions law, including an increase in the retirement age from 60 to 65. Tara Rivers lauded the extensive consultation process her ministry held over the amendment bill and said that the comments from the industry and the public informed the final draft. As the bill passed late Thursday, Rivers said it wasn’t a “panacea, but a far cry from where we are”.

In her lengthy presentation, the minister said the bill addressed long-standing concerns, including the culture of non-compliance, with larger and more fines and better regulation of the actual pension providers. But as a result of the participation of the community in shaping the amendments, she hoped there would be greater buy-in to the changes.

However, she was clear the long list of amendments was still only a first step on the journey to real pension reform and that it continued to be a work in progress to achieve future financial independence for retired workers.

As well as an increase in the pension age, the time employers must start paying pension for their work permit holders has been cut to six months after their start date but local workers must begin immediately. Employees working less than 15 hours will still require a pension because, she said, the idea of leaving them out was not supported during consultation.

The law now requires contributions to be made on up to $87,000 on an annual salary, which, combined with the increase in retirement age, would offer a better income replacement of around 60%. People will now be able to access voluntary contributions but only for specific purposes, such as buying a home, paying for education or health needs.

Employers must also keep proper records of pension contributions, as Rivers said the purpose of employee pensions is not to prop up businesses but to secure the future retirement of workers.

Detailing some of the many changes, she said that an education campaign would be rolled out shortly after implementation as she also signaled more committee stage changes to the bill.

Ezzard Miller, the independent member from North Side, slammed the legislation, criticising the legal jargon that is in some places incomprehensible. He criticised the minister for amending what was always a bad law instead of scrapping it and starting from scratch, noting that the minister had made changes to 51 of the 95 clauses in the law.

But most of all he berated the minister for doing nothing to improve the chances of a person earning $200 a week ever earning a pension and leaving a law on the statute books designed for business and not the people. He said there were people at the bottom of the salary earnings who have contributed for years but are receiving as little as a $100 a month — getting much less out than had been paid in.

Miller said the original law was hijacked by the financial services sector and the Chamber of Commerce, maintainug that, with around fifteen plans, it was clear they were making profit from it. Concerned that the government would not be able to afford to regulate the sector, he called for a single national pension plan and an entirely new system that met the government aims of actually having a scheme that gave people enough to live on when they retire. He also queried what impact fines would have on the significant numbers of employers who have not complied but have never been prosecuted.

“This law is not fit for purpose,” he said, as he urged the minister to create a committee of the whole House to draw up a new law and a new regime. Some of his comments were echoed by the minister’s former politically ally, Winston Connolly, who agreed that a new law was needed and it was time to stop building on past failures.

Opposition Leader McKeeva Bush, who was in the government introduced the law, which he admitted was “a mammoth undertaking”, said that while it was not perfect, given there was nothing at all beforehand, it had been a start. But he, too, said that it may be time to completely change the regime, but he wasn’t sure what was needed.

Premier Alden McLaughlin came to the support of his employment minister, who is now the only non-PPM member in government. But despite praising Rivers for addressing the major issues like increasing the retirement age, he also admitted the numerous problems with the pension regime and said the meagre amounts coming from private pensions still had to be addressed.

Despite the criticism it received support from all members who stayed for the vote.

The draft bill as it currently stands is available on the National Pensions Office website but it is expected to go through a number of changes on Friday during the committee stage.

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Comments (80)

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  1. Anonymous says:

    oh here we go again cayman…dusting our smelly knickers in public!!!!!!!!!!!!!!!

  2. Cayman K says:

    Expats and Caymanians alike should be able to draw on their pension contributions to purchase Cayman property to a limit of their Additional Voluntary Contributions.

    What’s fair to one should be fair to all.

  3. Cobbing runts says:

    I wonder if the government has been using the pension fund to gain lines of credit to pay off other mismanaged accounts?

  4. Anonymous says:

    So the government is stealing around 140,000 between me and my spouse.

    What would you do the person who steals 140k from you

    And cayman heralds itself as a christian nation, but happily ignore the 10 commandments.

  5. Anonymous says:

    When is the current draft bill expected to be passed? Will the government consider applying the “no refund” rule to new people entering into pension schemes? People who are already in pension schemes should not have the rules changed like this. It is undemocratic, but then very few people on this island are allowed to vote. Politicians hate us expats. I am disgusted by this blatant amendment by a woman who won’t ever be answerable to the people she is trying to mess with.

  6. Robbing Hood says:

    Stealing my wages? This is the same thing.

  7. Robbing Hood says:

    Why not just take my wages too? Oh, that’s right, that’s exactly what you’re proposing by stealing my pension.

  8. Play fair children says:

    You want equality Cayman? Push this bill through and see the UK step on you. It will only be a matter of time before your right to a British passport will be removed. Fair’s fair.

  9. Equal rights for some! says:

    Want to know the true cost of this pensions raid on us, to me? To you, as an expat? I’m a real estate professional with decades of experience and whilst commonly not respected or listened to here (when is advice listened to here?) you are going to want to listen now.

    CNS: This comment has been posted in full as a Featured Comment here: Consequences of changes to pension law

  10. Anonymous says:

    I hope that there will be more discussion in the community about this. Expats such as myself are subject to the rollover rules so why should we leave OUR pension contributions here? The minister should not concern herself with people who leave for good. Local Caymanians who plan to retire here need to be encouraged to save more. How else could they possibly hope to retire on a high cost island if their only contribution is 5% of salary? Even with the additional 5% from the employer, it is not enough. Ask any of the pension companies on island. All of them tell us that you need to save more…. The government is fortunate that with the rollover the number of retirees will be relatively small, but they are all voters!

  11. Anonymous says:

    I am not allowed to stay here or vote, yet a group of people not elected by me, who do not represent me, will now keep my money here, tell me what to do with it and have their stamp duty, service charge out of it?
    Meanwhile, kicking me off the Island and leaving my money in a small, unstable Caribbean island?
    No thanks.

    Where are we living? Zimbabwe?

  12. Anonymous says:

    This will be quickly buried under the weekends news and will only reappear when the third reading is sneaked through. This should not be allowed to fade awa!

  13. Ihope says:

    All mammon l, soon there will be no need for it when the Anti-Christ takes over.

    Lay up treasures of love and caring in heaven where rust and moth does not corrupt or thieves cannot steal.

    End of Days people!! Be prepared..

    • Judean people's Front says:

      Crap, losing my cash from my pension is bad enough but now you are telling me that the end of days is here too?
      What are the chances?

  14. Anonymous says:

    I can understand now why there have been so many high profile resignations.
    They have obviously got wind of what was coming down the line and want to secure what they are owed quickly.

    • Anonymous says:

      The funds industry in Cayman is slowly dying and moving to other lower cost jurisdictions. The people in the funds industry are usually well paid and are in high demand across the world. This latest law could push more of them to rethink their decision to stay in Cayman. It is certainly a huge wake up call to me and it has put returning home soon high on the agenda!

  15. Anonymous says:

    If you have to amend over 50 per cent of a law that tells me that you need a new law as the existing law is not fit for purpose.
    Amending over fifty out of ninety clauses without consultation of those affected or trying to expedite this under the radar quickly quite frankly stinks.
    Something, somewhere is not right.

  16. Anonymous says:

    The original pension bill 2015 removed the option to transfer your funds and they wanted to lock in all members until the age 65. This bill was formed by vindictive individuals who’s sole perpose was to mess with people money.
    The expats play a vital role in our economy and we should respect them.because if they all leave we can’t sustain our way of life. We need them not the other way around.
    All the expats need to complain to the governor to stop this bill from going through.

    Cayman need to remember Prosperity is not a birth right but a gift which can be taken away.
    Tara rivers people will remember you for the wrong reasons.!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  17. Anonymous says:

    If you look at the numbers, and at what the Camanian people want for the Caymanian people the the easiest path is just to intensify what is already in place: get more money out of the expats before we send them home. It’s called money for nothing and is a sweet deal for those receiving it.
    Short of this the only other solution I see is lowering our expectations.

  18. Annoyed says:

    In many countries if you are an expat, you don’t pay into pension. Is it really fair that people will return home retired and have to wait two years? How will they live? What if the retired on medical grounds before 65? How do they live? Legislators must understand that this isn’t a gift that you are giving to people but something they worked for

  19. Anonymous says:

    I have a few concerns regarding this not only in the manner which it has been done but also at the targeted population.
    The first reading was sneaked through under the radar and without consultation. The next reading again was rushed through in a very hurried and roughly bolted together form.
    Is the pension money running out that quick?

    The “sacrificial lamb” was pushed out in front and told to deliver a rather questionable bundle of amendments. Roll any bad news out late Thursday and it gets buried by other stories and news by Monday, that’s the old trick used everywhere.

    The ramifications of this are immense. Was it an emergency law? If so, why the sudden urgency to allow locals to dip into their pensions to pay of mortgages and re mortgages. Economically, this is a short term fix with long term destruction which result in further depletion.

    Why the rush to strip expats from receiving a lump sum?
    Why the desire to have the money remain on the island or is the next stage an emergency reading of the dormant account law, seizing accounts not accessed within a certain time?

    There has been no thought behind this and it is clearly a knee jerk reaction done in haste in a less than open and transparent form. This may well be UN constitutional, a breach of some separate laws and contracted agreements.

    There will be plenty of people who now resign and leave the jurasdiction as this formed part of their decision to remain. I don’t think you really realize the ramifications of this unless votes and local mortgage payments are more important than the economic survival of the island So!
    I cannot see the Governor signing off on this regardless of how quick you push this through
    .
    Either way, I am out of here as soon as I can sell my house.

    • Anonymous says:

      Agree totally except that I’m afraid that way too much thought went into it. Is it retro active?. I get very scared then angry when people try to steal my money and degrade my well being. What is going on here??

  20. Anonymous says:

    That’s right Ezzard fees to high because it is designed to rip people off. You can now buy a mutual fund with a cost of about .005% versus the 4-5% these companies are charging to manage your pension.

    It is a scam and a legally sanctioned one to provide jobs to people and profit to companies on the back of your retirement. Quite frankly, it is time to go and be replaced by a national scheme. In fact, the government’s pension program does better because it is not hell bent on robbing its participants but its fees too are still to high.

    Fees are killing your retirement. In a country with no direct taxation, your pension should be able to be granted at 60 but hey…you know the game

  21. Expat 22379 says:

    Get ready for one massive exodus!

  22. Anonymous says:

    It should completely up to a company if there want to provide a pension plan for their employees as it should be completly up to the workers if they want to work for a company without one.
    The civil service pension and health plan is a Ponzi scheme that is going to leave a lot of people with nothing when it bursts.
    Unnessecary rules and regulations are stifling growth in this country, we need to start rolling them back.

  23. Expat says:

    This is a terrible law on many fronts. The original law was controversial because at the time people complained about getting a 5% pay cut. They were so short sighted that they didn’t realise that it was finally a way to start saving for retirement with an employer contribution as a bonus. However, 10% of $60k max is not going to keep anyone in a comfortable state in their golden years. In other countries, the contribution rates are usually higher and when you pay taxes there is normally some form of social security or state pension. The 3 part approach of government, employer and employee helps to provide a living. No system is perfect in any country, but in Cayman there is a distinct lack of pension saving across the board without any government fallback option. I think this is due to the high cost of living which is just about sustainable whilst working. As an expat,I do not plan to retire here as I am realistic enough to know that $400 per month CUC and $900 per month health insurance and add the other bills for strata fees, hurricane insurance, water, cable and Internet will be too high even if I pay off my mortgage.

    I sincerely hope that Minister Rivers reconsiders the option of disallowing refunds of pension contributions. It is more tax efficient in every country to transfer from a bank account and not simply pension to pension. In addition, many pension plans insist on the pensioner taking out an annuity. With the current low interest rate environment that is not attractive. The minister should not concern herself with people who have left the island and will not return to make a claim on the government. Many of us work hard in the community in addition to our jobs and should be allowed to make our own choices about we fund our retirement. the government could make it mandatory for the expat to sign a waiver…although they have no claim on government funding either now or in the future!

  24. Anonymous says:

    I never saw a new piece of legislation that was brought to the house yet. Amendments and more amendments.
    Is obviously Cayman law makers don’t know how to make money.
    If the was the case we would have more than two main streams of income besides tourism and financial industry.
    Vote Donald Trump for George town for 2017.!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  25. Anonymous says:

    They raised the age of retirement in the hopes that you will die before you try to withdraw that money that won’t be there when you need it lol…….sad really.

  26. Anonymous says:

    How can a minister stand up and present an “imperfect” pension bill and have to withdraw the ill thought out education bill and still keep their job? The woman has presided over a demoralized teaching workforce, singularly failed to listen to her wider team and prefers to take the advice of failed ex employees. Enough said.

    • Anonymous says:

      Because this is Cayman where incompetence is a prerequisite to joining the leadership club.

    • Anonymous says:

      In her defense, the agencies she is working with are so F*#%%#^**kd up that God himself has turned his back on them and the behorned dark master himself is recklessly ‘guiding’ them

  27. Anonymous says:

    The bottom line is – the pension money and health insurance is drying up as there will be more takers than givers.

    • Anonymous says:

      Thanks Mac!

    • Anonymous says:

      I personally feel the Gov’t should only have say in the Civil Service Pensions and Health Insurance as their staff do not contribute to either. It is 100% paid by the CI Gov. I work in the private sector and pay my 5 % pension and part of my health insurance. It is my money that I worked for and no entity should be able to tell me what to do with the money I earned. They might as well abolish it as it is not run efficiently whatsoever. At the rate I’m losing money from it, I rather get it all one lump sump and do what I please. At least let me be the one to squander it verses so called trusted ppl investing it.

  28. Being reasonable says:

    What I find laughable about raising the retirement age increase is that it is not mandatory. My employers currently do not wish to participate in extending the retirement age from 60 to 65. My little pension and savings will be eaten up in no time considering the high cost of living. Bearing in mind the mandatory pension contribution was not in effect until some 15 years ago and if I got 5 more years to go to retirement then I really don’t have much time to add to my little savings.

    The new law is just a facade and a dud!

    • Anonymous says:

      You are responsible for your own savings, ultimately. The reason pension contributions are now mandatory is because clearly people were not taking responsibility for saving money for retirement on their own. Don’t blame government for having to force you into longer-term financial planning because you were unable to do so on your own.

      • Anonymous says:

        Most of the real workers here could do much better then the government mandated pension and insurance scams. Not all are that stupid with their money. I do blame them for making me do it their way when I could do much better just so they can get their cut of my earnings. In case you don’t know their way is a failure on so many levels.

      • Anonymous says:

        But wait. You said it was MY responsibility. Now I am confused.

      • Anonymous says:

        When you sign up for a contract here ns the payment in cash option is part of the deal, that is your financial planning right there. I have based my savings and financial plans on this whilst maintaining my insurance contributions back to my country to ensure that it is up to date. That is my financial planning right there.
        So now the government have come out with this bunch of crap, whatever careful and deliberate plans were made have now been thrown into chaos.
        I would like to think that if voter had the balls to challenge the double dipping, salary grabbing so called politicians here, the answer that they don’t get is “don’t blame the government for forcing you into longer term financial planning”.

        In years to come, I will remember this line and quote it when the pension and health money finally run out. By the looks of it, that won’t be too long.

  29. ROI says:

    And ironically locals are in the worst position because we can’t even get our money out. I’m retired and fortunate enough to have no
    need of the money in the fund. At best I am limited to tiny withdrawals, however I would really prefer to get my money out in one lump sum before the fund managers whittle it down to nothing.

    Heaven help all the people who actually need these pensions.

    • Anonymous says:

      I call BS! This has been designed to give locals access to use their existing pension to pay off mortgages / re mortgages, so they have the first rush to the trough!
      What may be left, now has to be kept on island where it will be subject to seizure if it is not accessed or hit with stamp duty and service charges.

      So don’t give me that crap about locals being in the worst position!
      In your own post you even state you don’t need it!

    • Bollox says:

      Read the amendments. It is geared towards you, no one else.

  30. Kittyboy says:

    You know what helps grow small businesses on the brink….more fines.

    • WaYaSay says:

      You know what helps grow small businesses on the brink…………stealing employees pension contributions.

      Dont do the crime if you cant do the time……….no theft of employee pension contributions, no fines.

      • Kittyboy says:

        You are so right, it is better for Caymanians to lose their jobs when a business closes, than to have delayed pension contributions. We were in a position where we could only make employee contributions for several months, if we had to pay the employer matching amount, plus fines we would have closed our doors. Who does that help?

    • Anonymous says:

      So comply with the law like your competitors!

    • Anonymous says:

      Tara let me say something…yes I maybe a work permit holder, BUT THIS IS MY MONEY I PUT INTO MY PENSION and if I leave Cayman, I want my money in a lump sum. This Island is so unstable and if any of these pension providers go under (look at Caldoenian Bank), what happens to my money??? Why should I keep it here? It is non of your concern what I do with it once I am gone from Cayman. I want to enjoy life not get it in drips and drabs??? Who gives you the right to control my pension ONCE I LEAVE CAYMAN??? THIS IS TOTAL BS!!!!

      • Anonymous says:

        Ok. Promise to never ever come back and it’s yours.

        • Anon says:

          Don’t worry sweetheart its people like you that are driving us away. Just how do you think your pension will do exactly without all us expats putting into the pot? Hmmmm – but then that’s the attitude and short sightedness we’ve come to enjoy. I’m not sure you or YOUR government quite get it, do you! But you know what, we will all leave soon enough and take all our investments and money away too.

        • Anonymous says:

          I will promise in writing. Why would I ever want to come back there? You aren’t the only game in town you know.

        • Anonymous says:

          I think you will find quite a few never coming back after this colossal s@@t show!

      • Anon says:

        Another giant F@#k you expats! I’m sick of this place. It’s my money. I can’t wait to get away from here. I’ll get a lawyer and get my money somehow. Cayman just really hates us hey!

      • anonumous says:

        Does any country give the pensioners all of the money in the pension at one time. As far as I know everybody receives a monthly cheque. I don’t believe they even get a lump sun up front. This is a new day.

        • Anonymous says:

          What difference does it make what other countries do? For 9 years I contributed to something on the grounds that I would get it back when I leave. Then I leave and the rules change? F that.

        • Anonymous says:

          In Cayman, expats get rolled over. What is the point in working here for 7 or 8 years and then allowing those contributions to sit for 30 to 40 years? Why would the minister create more hostility against expats. She does not need to concern herself about people who leave the islands permanently. This just another cynical money grabbing exercise from people who cannot vote her out of office. I am sick of it!

          • Enough whining, go home! says:

            Goodbye expats – you won’t be missed – Caymans will become employed! Monies will stay in this Country!

            • Anon says:

              ITS NOT YOUR MONEY! Entitled attitude that’s gonna leave you and your precious country screwed! I’ll watch it’s destruction from elsewhere.

  31. Anonymous says:

    Many are the plans in a man’s heart but only God’s plan will prevail in the end.
    Victory for Tara rivers but Failure for our elderly people who can’t afford to live on their pension in Cayman.
    Our political leader are blind and don’t have no for sight beyond past four years.
    May God have mercy on Cayman for what is about to happen !!!!!!!!!!!!!!!!

    • Anonymous says:

      Awaiting your PR result still? I would say after this little beauty was wheeled out, the decision will have been made by the applicants right then and there.
      Keep treating expats like crap and the knock on effect will be evident.

  32. Anonymous says:

    So following Ezzard’s thought process, somone earning 200/week would likely be contributing about $1k/year into a retirement plan, or about $80/month, yet says they are only getting $100/month back from their pension…mandatory pensions have only been around since the late 90’s, maybe 1999(?) and anyone retiring in the next 15 years is unlikely to have saved enough, except maybe politicians who retire on 60% of their salary after 8 years in the job. They would pay in around $100k-150k to secure a lifetime payout of 60% of their final salary, say $70k pa. For anyone else drawing that much pension would see their pot drained in 2 years. Nice if you can get it, just not very sustainable for the country, not sure how that compares to civil servants?

  33. Anonymous says:

    I don’t get it, if you know the bill needs improvements then why not use the opportunity to make the improvements now. Either she needs better PR or she just plain needs to do better.

    • Anonymous says:

      You fail to understand that the best she can do is still a failure. She can’t do better than that. The only reason she has the post is that according to Caymanian law she was the best Qualified person. Now do you get it?

  34. Anonymous says:

    Tara Rivers is hopeless as minister

    • Anonymous says:

      Ms. Rivers is so busy trying to leave her idea of a legacy that she rushes through ill thought out legislation. She is so know it all that she does not want to take the time to do proper reasearch and to arrive at sound policies. She who knows not and knows not she know not.

      • Anonymous says:

        What has not yet been reported is that her Education bill was withdrawn today. Another bill which needed greater thought and time. Effective government is not about fooling people with half baked policies. It is not about saying “you see I have passed 10 laws since January-no one catch up with me.”.

        • Anonymous says:

          Oh dear Tara what does it say about you and your Education Bill. Seriously you are a shining example of the Peter Principle.

        • Anonymous says:

          The Bill was not wirhdrawn. It was moved over to the next Session of the LA because the Premier and Minister of Finance had to travel to London next week the LA had to end today. Gef your facts straight!

        • Anonymous says:

          No I am sure you know the Education Bill was not withdrawn. The Premier was very clear as to why it was DEFERRED to the next meeting. Do you need help understanding the difference?

    • Anonymous says:

      Who is she? I did not vote her in and I could not even if I wanted to. I do not recognise her as any person elected by me that represents me.
      I do not recognise this bill that she has passed as I am un represented and was not allowed to vote for this or any government.
      I therefore believe that my constitutional rights have been breached as I am not allowed to stay yet my pension must!
      What right does she have to dictate what occurs in my future or in my finances in a country where she has no jurasdiction or elected standing?

  35. Anonymous says:

    Hopefully amendments to Health Insurance Law soon come!!

    • Anonymous says:

      All the laws in Cayman are just laws on paper and are there for the little people(poor) to make them poor. The bible states that the rich shall be richer and the poor, poorer. Don’t you see what’s happening, immigration law, pension law etc are not being enforced because the ones that you complain to and the ones breaking the laws are friends so when someone makes a complain it falls on deaf ears. Not to mention the education system, I think sending our children to year 1 at 4 yrs 8 mths – 5years is apart of of the problem with the system, also every time there is a change of goverment the curriculum changes which confuses our children. Yet we wonder why the children are failing. our neighbor’s chidren are taking CSEC/CXC, GSCE at ages 17-19 while our children are doing the same at ages 15-16. I believe that if our children take their exams when they are more mature like our neighbor we would see better result.
      Everything the US does we copy why not copy their policy, if the child does not pass the class he doesn’t move forward and stop pushing children who are failing through the system and them we wonder why we are having the problems that we are having. Successful children,successful country. God bless us all.

  36. Anonymous says:

    The most unfavorable facet to the employee still remains — the funds are not insured. I have lost several thousand dollars over time from my fund. If the funds aren’t invested securely, I’d rather risk my own money myself, instead of having to bear the consequences of others making poor investments.

    • anonumous says:

      I don’t believe any pension funds are insured. I worked with a very reputable company that was quite generous with pension and other benefits and back in 2008/9 the pension fund lost quite a bit. I had to work longer that I expected and saved more than I was doing to build back the fund. It was not insured. How can any institution insure against the chance of the world economy going bad? I don’t know, but would appreciate if someone in the know would explain this for us.

    • Anonymous says:

      Well I would hate to see the cost of insuring the funds! Do you not think that the cost of that will certainly erode any investment performance quite significantly?

  37. Anonymous says:

    Doing something you know is wrong or just not right is pure insanity

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