Pension exodus emerging as reality

| 05/10/2017 | 183 Comments

(CNS): The predicted exodus of expatriate workers as a result of  changes to the pensions law appears to be becoming a challenging reality for Cayman. From small businesses losing experienced staff to mass departures from larger employers, the warnings that more than two thousand people could leave the island before the end of December appear to be coming true. But despite alarm bells ringing and the mounting evidence that many work permit holders will be leaving in the middle of peak season, there is still no indication from government that the relevant authorities are taking any action to deal with this potential human resource crisis.

Deputy Opposition Leader Alva Suckoo (Newlands) has voiced his concern that the government has missed an opportunity to get the many unemployed and underemployed locals into some of the vacancies being created by the exodus, but he is also concerned that business is going to be seriously affected.

Suckoo filed a private member’s motion about the issue, which government rejected at the last Legislative Assembly meeting in August as the premier, who has responsibility for both immigration and labour in the coalition government he leads, said there was no basis to believe there would be an exodus of workers as a result of pension law changes. He described the exodus as purely speculative with no data to support it.

But over the last few weeks CNS has been collecting anecdotal evidence from expatriates who are planning to leave, business owners likely to lose key workers, human resources departments trying to organise replacements  for large numbers of people resigning and rental agents losing tenants, all of which point to what could be a serious economic problem within the next few weeks.

Foster’s Food Fair has said that nearly two dozen workers have already given notice, Tortuga is losing key staff, while the Marriott Hotel and the Ritz-Carlton, Grand Cayman are understood to be losing hundreds of people — just some of the major businesses across Cayman that have confirmed they are losing staff who want to leave before the pension refund ban kicks in on 1 January.

Speaking to CNS, Suckoo said he raised the issue through the motion because he knew there was a high potential that many people would leave so they could claim their full pension.

“My first concern was that if the government did not address the issue proactively and try to get as many Caymanians either into those vacated jobs or on a path to qualify, this would be a lost opportunity,” he said. “My second concern is business continuity. If businesses experience a sudden exodus of labour, they are going to be negatively impacted and this will clearly not benefit them or the economy.”

Noting that his motion addressed both of these concerns, he said he was very disappointed that the government dismissed them and voted against the motion, “and now they are left with no alternative but to ensure that businesses get replacement work permits”.

Small business owners told CNS about having to face a general disruption to their business with experienced and trained staff leaving, and the fact that not everyone has revealed their intentions. They said they fear that at the end of November all their foreign workers impacted may decide to give notice, leaving them with just four weeks to find and replace valued staff, which they have no doubt would impact their businesses.

There is also a groundswell of speculation that the departure of thousands of workers and their dependents will negatively impact the economy and have a chilling effect on government’s rosy predictions for growth.

In October 2013, when the previous PPM administration was faced with the potential mass exodus of about 1,500 term limit extension permit holders (the result of a stop-gap initiative to tackle the post-Hurricane Ivan departure of workers), the government amended the Immigration law to stop that from happening.

Justifying this amendment, Premier Alden McLaughlin said, “We would have had close to 1,500 people with dependents leaving the country at once; people not buying groceries, not paying rent, not buying gas. It just wasn’t in the best interest of the Cayman Islands.”

But now, presented with another exodus that is potentially far greater and would create very similar circumstances, the government is taking no action.

“Once again, the Caymanian people have been relegated to low priority and the ‘Unity’ government has chosen to play politics with my motion rather than seize an opportunity to help those who need it,” Suckoo said.

See the debate in the LA last month and the premier’s position on the issue on CIGTV below:

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Category: Jobs, Local News, Policy, Politics

Comments (183)

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  1. Anonymous says:

    The Pension was always supposed to have been for retirement. That Cayman let expats come to Cayman and deposit funds into a pension scheme and and then let people get a ‘cash’ refund upon leaving the Island was always a stupid idea. Pension schemes are supposed to be designed to allow people to ‘save’ for ‘retirement’, to have money to live on instead of becoming a burden to society, their children and the country’s welfare system because they did not ‘save’ during their working years and create a ‘retirement’ fund to live on or supplement their savings….

    I guess because Cayman knew these people would not retire here they thought they could use the expats money to their advantage (to invest in pension schemes) until they left but the reality is it will now will affect Cayman in more ways that originally thought.

    I thought the reason why work permits exist in the first place is because a qualified or skilled Caymanian could not be placed in the first place? To say that Caymanians will naturally fill these vacancies being created will ask questions as to why they were not placed in those vacancies to begin with….and why immigration allowed a WP in the first place? Are they not doing their job? Is something missing from this process? I am very eager to understand this.

    I am proud they changed the law because not enough people fully appreciate how necessary a retirement fund really is but I’m being realistic that we can’t just place unqualified and unskilled Caymanians into vacancies for the hell of it.

    I advocate for more education opportunities for Caymanians, more government funded retail courses, hospitality courses, and traineeships and apprenticeships that place Caymanians in businesses with govt incentives to the owners for on the job training. The Cayman govt is behind the rest of the world in this regard and that is what is affecting Caymanians more than anything.

  2. Anonymous says:

    No work permit holder need a pension only health insurance. If there not going to apply for the right to stay there need no pension

  3. Anon E. Mus says:

    Can’t say that I didn’t see this coming… lol why not just implement a small tax on the pension then if that’s the case? DO they think that only Tourism based jobs are going to be affected ?/ 😀 wait and see…. it’s like this government has a severe allergic reaction to foresight

  4. Anonymous says:

    This has been common knowledge ever since the new law passed! I have been hearing about work permit holders planning to leave and take their pension funds with them, and returning after the “waiting period” has passed. What moron didn’t see this coming?? SMDH

    • Anonymous says:

      When you use the word ‘moron’ you confuse people who will naturally think of the &@%## moron that the Russians installed as the president of the United States.

  5. Anonymous says:

    Hey Caymanians,

    I don’t know what you are complaining. It’s ridiculous that you pass a law to give incentives for expats like myself to come here and then complain about when we leave with what was promised us.

    Your people made the laws which is a great incentive for expats like me to come down and have good savings when I leave. You can’t blame me for taking advantage of this incentive you gave me. Wouldn’t you have done the same? What you should do is find a similar plan for the locals.

    I’m leaving soon but still love it here. I did a great job while I was here and my employer has promised that he will take me back when I return in a couple of years.

    Thanks and all the best Cayman!

    • Anonymous says:

      It’s because the politicians are trying to increase the population but the people don’t actually want that.

    • Anonymous says:

      We will look forward to seeing you again. Please remember to bring any funds you have taken out of your pension and deposit them on your return.

      • Anonymous says:

        According to official presentation from the Pensions office after this law came in, that is the reason they made this law. Apparently they don’t want us cashing in and coming back.

  6. Anonymous says:

    It may have already been mentioned but I wasn’t going to go through 130 odd comments but surely if a load of pension contributions drop off by way of people leaving it leaves the fund in dire straights. So lower contributions coming in, yes you will have new people enrolling but not for 9 months from arriving so there will be a void in the amount of cash the fund managers have to invest in hedge funds or whatever they buy to make the fund profitable…

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