The plight of pensioners

| 02/12/2016 | 49 Comments

Cayman News ServiceMM writes: Government must address the amount of funds paid to retired civil servants on ex-gratia pensions. This amount is currently set at CI$300 per month for anyone who was employed for less than 10 years or CI$500 per month to anyone who was employed for 10 or more years with the government prior to pensions contribution being introduced to Cayman.

I believe it is safe to say that one cannot expect a retired person to survive on CI$300 a month.

I am aware of someone that has a combined tenure with government of 21 years; 12 years after pensions and 9 years prior to pensions being introduced and they are receiving CI$300 per month in ex-gratia only.

The now 70+ year old individual is receiving CI$300 because the pensions contributions gained during the 12 years employment after pensions contributions were introduced was exhausted when the government placed the person on the “permanent and pensionable” contract after retirement at 60.

The permanent and pensionable contract allows a worker to continue working past 60, but they are paid pensions and salary together but no longer contribute to pensions.

Unfortunately, the pensions department did not make it clear to this older Caymanian that taking that option would mean they were left with nothing coming in at all monthly after final retirement.

Fortunately, this person was employed previously with the government in the 60’s and was able to claim the ex-gratia. If the person had not had a history with government, they would be receiving absolutely no income at this time! (I am curious to know how many people are actually in that situation.)

Considering how the cost of living has increased, this is an area that the government should have a look at, at least increasing the $300 to $500 and perhaps the $500 to $800.

So much for all the rant about older persons mattering or perhaps this particular process has just been overlooked. But if our government is truly taking proactive steps to ensure the well-being of our senior citizens, I would think ensuring they have enough to live on would be the first step (especially a past civil servant).

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Category: Viewpoint

Comments (49)

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  1. Anonymous says:

    We are two college educated individuals working in the private sector, raising two children and are fully aware that we won’t be able to spend our retirement years in the Cayman Islands – the cost of living here is simply too high. We don’t have car loans, our cars are 8 years and older, we don’t have a boat, I don’t get my nails done, we only go out for dinner at special occasions etc etc, Still, we would never be able to save enough to have a comfortable retirement in Cayman. The utility bills and health insurance alone would be way too high.

    There are all kind of websites available where you can calculate how much money one would have to save in order to have a decent retirement and those amounts are just not attainable for most people.

    Yes, Cayman is tax free, but at the end, the cost of living takes away the benefit of earning a tax free salary unless you are in the upper income bracket. We all know that you can buy elsewhere a whole shopping cart full of groceries for what you spend here on one little basket of goods.

    • Anonymous says:

      Anonymous 8:06 you have articulated pretty much where I am. Although I am a single parent of one child, I am also college educated and find it hard to meet our needs and save for retirement. I don’t live a lavish lifestyle but things like rent/mortgage, insurance and CUC make it extremely difficult to do so. I drive a 2003 car and am frugal but there is no light at the end of the retirement tunnel in Cayman for me. It’s worrying.

  2. Anonymous says:

    Why should these people be entitled to money when they did not save enough when they were working? Spend, spend, spend when working and let someone else foot the bill for their pension? Pathetic.

    • MM says:

      I addressed this same query below in a response to another person raising the same question.

    • Anonymous says:

      2.27
      And how do you know that? May be they weren’t making enough money to start with, may be they are ill, disabled, have a large family?
      Such rich country as the Cayman Islands could have stashed large funds to take proper care of its people who are disabled and retired had they had brains
      Look how Norway has done it with its Sovereign wealth fund.
      This country spends surpluses revenues instead of prudently squirreling away.

  3. What-about-me? says:

    There are numerous civil servants who have ‘retired’, are receiving their pension but have been hired back on ‘contract’ to do the same job at the same salary.
    Raising the retirement age has simply compounded the issue and leaves no jobs at the bottom of the ladder for school-leavers.

  4. Anonymous says:

    Say what increase the $500 to $800. I will have worked for government next year for 20 years and if I take retirement (as I will be 61) I will only be getting $750 per month pension. I find it hard to swallow that after working for so long and being reasonably paid (certainly not low end) that I will be getting less than what you are suggesting for those that worked the bare minimum. If the pensions are being revisited then it would have to be revisited for all.

    • MM says:

      I am not sure how you have arrived at the conclusion that the person I mention in my comment was working at the bare minimum. Of course, salaries of the 1960s differed greatly but I should imagine every position held in those days was the foundation for what we have now so obviously individuals who were in the Civil Service workforce at that time can be counted as no less important than any we have now.

  5. Anonymous says:

    This is a huge problem that does not get talked about!
    And is a significant contributor to the exponential increase at Needs Assessment Unit.
    Yes it’s a lack of planning by individuals…but it’s also a very real lack of planning by successive governments too!

    • MM says:

      It is a lack of planning by the whole country. The development in our islands took off much faster than anyone could have imagined and left many, many native people behind.

  6. anonymous says:

    Wow,
    In my home country pensions are guaranteed and are sufficient for basic living. Some get higher pensions, some minimum, but there are no people left out. In addition there are many subsidies, such as housing, utilities, transportation, medication, low rate airfares, free healthcare, subsidised groceries. Nothing fancy, but no one is left out. Healthcare is also free. 30 days treatments in sanatoriums are also free and include lodging and meals. There are sanatoriums where people get post surgery treatments, rehabikitations and it is also free once one reaches the age of retirement or disabled.

    • Jotnar says:

      And in your home country income tax and social security taxes are how much….?

      • Anonymous says:

        For the average working person, far less than the taxes here.

      • Anonymous says:

        Government makes a pretty good whack here off duties (taxes) and work permit fees. If they were mindful of how it is spent, perhaps more could be done for the elderly.

      • Anonymous says:

        13% on personal income and Zero SS tax for employees. Employers contribute to the Pension fund.

      • Anonymous says:

        Capital renovations of an 80 years old person are reimbursed 100%.

    • Anonymous says:

      In your country people also pay income tax I imagine to cover the expense of these “free” benefits.

  7. Anonymous says:

    means test all pensioners!

  8. Anonymous says:

    Cayman legislation came in around 1999 to make pensions mandatory, which is very late in pension terms, there will be many more people looking forward to a bleak retirement if they only have the statutory pension scheme to rely on. The amount put into it is low, the returns over the past 10 years are low and the time contributing is too short to make many gains. They better hope they are well enough to keep working in later life, or have something to sell.

  9. Anonymous says:

    But why wouldn’t someone be adding to that?? I just can’t imagine what anyone would be thinking to not take responsibility of their own well being at retirement. You know, like all the MLA’s are doing!!
    Double dippin’ XXXXs. (CNS if that word is unacceptable please feel free to XXX it out)

  10. MM says:

    https://www.caymancompass.com/2011/04/12/bush-justifies%E2%80%A8double-dipping/

    Excerpt:

    “Premier McKeeva Bush justified his and fellow politicians’ decision to receive their parliamentary pensions while still serving in the Legislative Assembly, saying by doing so, they save the country money.

    “Opting to receive these benefits at this time, in effect, has closed the defined benefit plan to those of us who opted out, thereby reducing the future cost to government that would have resulted in some cases, from additional years of service specifically in my case, as well as the others, cost of living and any future salary increases. We can’t be paid on any of these things,” he said.

    Mr. Bush, George Town MLA Kurt Tibbetts and Bodden Town MLA Anthony Eden are receiving pension payments in addition to their monthly salary.

    The premier earns about $160,000 per year in salary following a 10 per cent pay cut he took in 2010. He can earn more than $100,000 per year in payments from the parliamentary pension plan at the maximum payment of two-thirds of salary.”…

  11. Anonymous says:

    Without meaning to seem cold and uncaring, the fact is many of these persons did not make arrangements for their retirement. There are thousands of former private sector employees in this position, and they get nothing. Families should be required to deal with shortfalls before taxpayers, and everyone should do all they can to save for retirement.

    • Anonymous says:

      A person who is 60 today was born in 1956 and was making little money compared to 2016 earnings. There was nothing left to save and the Pension plan did not exist until 1999. Marker crashes have wipedout whatever they managed to save.
      Don’t judge unless you walked in someone else’s shoes.

  12. Anonymous says:

    My parents taught me to plan for retirement and put $$ aside from every pay cheque. People shouldn’t expect the Government to pay for them to live out their golden years and if they have fallen short then their families should be stepping in as I’m sure they provided for their kids, and most likely grand kids, throughout their childhoods.

    • MM says:

      As a still developing country many of these civil service pensioners now in their 60s, 70s, and 80s did not have parents with the foresight or experience to even understand the concept of retirement, let alone plan for it.

      Whilst business, law, economics and the like have been widespread in developed countries for millennia, native Caymanians born between 1920 and 1950 and still living would obviously have not been exposed to the idea of retirement in an environment based on financial, legal and tourism industries.

      In particular, the Caymanians with slave ancestry or poorer ancestors would certainly have not been provided with this valid life lesson.

      In the days when they were growing up (and growing old) many of these people would have thought they would have been “retiring” as their parents and grandparents did: on a front porch with all your family next door, everyone who cooked dinner would drop a plate off and the grandparents would get visitors 3 and 4 times a day from anxious and concerned children and grandchildren versus now when the only visits they get are monthly (if they’re lucky) or from a nurse in the rest home.

      It appears our now too busy lives cannot accommodate the slower moving and slower thinking individual our elders have become, though they toiled daily to feed, clothe and change crappy diapers for the first years of our own lives.

      This reminds me of the statue in George Town with the young girl reaching out for the world running eagerly up the steps and not even looking back at the elderly lady lagging behind trying to climb the steps too – a fitting sculpture to be placed in our capital and directly in front of the LA building.

      Obviously civil servants and other younger pensioners have this concept more thoroughly ingrained and as the elder pensioners grow older and pass on I would expect that this situation will wean; but the Cayman of 2016 could have never been envisioned by someone born in the 1950s (or even the 1970s for that matter).

      The issue we have happening locally is not isolated and many countries have been faced with this same transitional dilemma; but it must be addressed and I do not think an elderly person should go hungry because you feel their parents should have taught them about retirement.

      • Anonymous says:

        Their families that they worked hard to provide for should be helping them. At what point did it become the Government’s responsibility? I’m sorry but if my parents needed help I would help them as best I could and not rely on everyone else to take care of them for me. I would sacrifice for them as they sacrificed for me for close to 20 years. It’s good brought-upsy!

      • Rod says:

        This is so true that it moved my soul!

      • Anonymous says:

        “The Caymanians with slave ancestry”??? What? It is pathetic to blame poor financial planning and overspending of income in the 1990s on something in the 18th century.

        • MM says:

          There are still parts of the world where people are struggling with being disadvantaged by slavery for over 300 years, why are you surprised that there are families in Cayman that have remained on the lower end of the financial scale sense emancipation (many of which do not even realize the link themselves).

          Your comment shows you do not understand much about historical influence on socioeconomics.

          This is the exact reason humankind continues to make the same stupid mistakes that keep our race from becoming more effective – we may believe technology is a sign of our advancement of a species when it indeed proves otherwise – making a computer think for you is more evidence of a mental deficiency than true dexterity.

          There is a strong reason the world’s most powerful and influential people spend much of their lives studying history (which is compulsory in great depths in particular with European monarchy and political leaders of larger countries).

          I am beginning to understand more and more why those leaders call the masses “commoners”; because the thought-processing is agreeably very common. Surely, all it really takes is bread and circuses.

          • Anonymous says:

            excuses much??? look at Obama or Carson from the ghetto and single parent homes to the TOP BOO HOOO my extra great grandfather was a slave ….. so thus I will not amount to anything

      • Anonymous says:

        MM. do you not think enforcement of the maintenance law would solve most of these issues?

        • Anonymous says:

          Enforcement of maintenance law means the deadbeat dads will finally get a job instead of living with their mothers and driving around in other peoples cars.

      • Jotnar says:

        So your argument is that these people thought their kids would look after them, as in generations before, but their kids let them down, so now everyone else’s kids have to pick up that burden as well as looking after their own family?

  13. Anonymous says:

    Pension is calculated on number of years and salary at the time of retirement. If your salary is low and your time 10 or less years, what can one expect?

  14. Anonymous says:

    When did these people not make adequate provision from income? Surely the evidence is they were overspending while in employment.

  15. Anonymous says:

    I am currently aware of a retired civil servant in their seventies who receives CI$60 something per month. Yes, you read it right CI$60 (sixty something dollars per month). How about that???

    • MM says:

      And yet there are politicians receiving over $2000 per month pensions plus six-figure annual salaries who want to be re-elected.

      • Anonymous says:

        Try 8k per month for a 2 term politician – 2/3rds of their final salary, or about $100k per year.

        • Anonymous says:

          Or 3:27, the judges, 80% of their salary.

        • Anonymous says:

          Maybe you should go get elected in May 2017 then. On a more serious note when government mandated pensions they should have also mandated income, property tax and social security, That is the only answer. No one, no matter how long they worked should expect any kind of comfortable retirement if they did not save for it, and did not pay taxes. May sound hard but that is the reality.even private sector pension without personal savings will will be enough. Pensions were mandated much too late for a lot of retired/ retiring persons. Younger workers will fair a little better, but they also must try to save on their own. No government will be able to come up with $750- $800 for the elderly who were not in the pension pool, even those who paid in will not get that kind of money.

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