Pension fund fine, says Fidelity boss

| 11/05/2020 | 45 Comments
Cayman News Service
Fidelity Financial Centre, West Bay Road

(CNS): Concerns over the Fidelity pension fund have been dismissed by the president of Fidelity Bank (Cayman), Brett Hill, who told CNS on Monday that all valid applications made by its 11,000 members to take money out as part of the emergency withdrawal will be met. The form is now available on the website and additional staff have been taken on to deal with the multiple inquiries, Hill said, as he urged members to ensure their application forms were properly completed.

“The pension fund is fine,” Hill said, adding that allegations on social media about problems with the fund were completely unfounded. He noted that the pension has always been a separate segregated fund owned by the memebrs.

Hill confirmed that the administrating company Fidelity Pension Services was sold by Fidelity bank to RF holdings last year (see release below) and the approval of that sale had been given by CIMA at the end of 2019. But approval for RF Holdings to manage the separate financial entity had not been given until the beginning of this month, “which had proved to be a difficult time”, Hill told CNS.

The bank president asked people to be patient and explained that there was a process to this emergency access to pension funds. He said the money was there and there was no need for members to be concerned. He further noted that the audited accounts for the funds were available to all members.

Hill said that, given the layout of the Fidelity offices, they are not able to open yet because of social distancing protocols under the COVID-19 shelter-in-place orders. But he urged people to visit the website, where the forms are now available as well as information about the withdrawals and answers to frequently asked questions.

His main concern was the ability of people to access notaries to ensure that members’ identities were properly confirmed for security reasons, as he urged government to help with access to notaries. Hill added that people must ensure that all of the information required for the applications was complete and accurate, explained that this would be the issue, if any, that could delay a member’s access to their money.

Press Release – RF Group purchase of Fidelity Pension Services from Fidelity Bank, 5 May 2020


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Comments (45)

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  1. Anonymous says:

    I submitted my request on May 14 and still no response. My other pensions providers have already responded way within the 14 day time frame. What is the Penalty for them not meeting the deadline? Is there any?

    • Anonymous says:

      Fidelity is hiding from all their clients because they doesn’t want to pay. Tons of people having same problem their applications were submitted and they haven’t received any response within 14 days or at all. I advised most of those people to report them and boycott them when things get back to normal. I personal told my clients to not do any future business with them they are very unprofessional.

  2. Anonymous says:

    Compass Reports – follow back up on this as a number of person after 14 working days have not received a confirmation letter to say approved or not. Something is definitely up with FIDELITY giving people email response or their money.

  3. Anonymous says:

    I don care what happens whit fidelity pension I never trust in that bank the only thing I whant is my pension moneyyyyyyy

  4. Investment Advisor says:

    If you are qualified to make investment decisions why can you not manage your own money instead of someone else taking fees and under-performing the markets year after year?

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  5. Anonymous says:

    PLEASE CHANGE LAW FOR FULL PENSION WITHDRAWAL NEED THE MONEY NOW

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  6. Anonymous says:

    There seems to be a lot of misunderstanding of the timeline for making withdrawals from any local pension plan. The first day on which a withdrawal request could be made was 1st May. Most local plans calculate the net asset value per unit or share (commonly referred to as the NAV) on the last day of each month. Therefore anyone who gives notice to their plan of a withdrawal request on any day in May will withdraw at the NAV on 31st May. No one knows what that NAV will be ahead of time. The March NAVs of the funds should already be available, and the April NAVs should be available soon. It normally takes about 2 weeks after month end to get all valuations of assets held by a plan and calculate the NAV. Anyone making a withdrawal in May should be able to find out the NAV of their plan at 31st May by the third week of June and receive a cheque or a wire transfer to their bank account shortly thereafter. Hope that is helpful.

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    • Anonymous says:

      It gets more complicated for the Pension Fund Directors who will have to make some choices on what to liquidate by settlement date to meet the CIG payment deadline. Some of the portfolios are invested in offshore hedge funds with quarterly dealing windows and record dates outside of the 45 day current period. Those can’t be liquidated at the click of the fingers, so it means those remaining in those portfolios will be skewed out of normal asset-mix, at least temporarily, and their expected performance may suffer as a result….or maybe it will improve?

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      • Anonymous says:

        It’s a pension, so the amount allocated to alternatives such as hedge funds should be relatively small. Worst case maybe 20% of the funds will come out. People are only allowed 25% + 10K. Some will choose not to withdraw and many people who have left the island will be ineligible. They should easily be able to generate enough cash by selling a pro-rata portion of liquid equities and debt instruments they own to meet redemptions. They can rebalance as required over time.

  7. Anonymous says:

    At the Fidelity Pension Plan AGM in December, they explained that about 60% of the Plan’s investments were invested in AAA rated money market funds (cash, but safer than a bank deposit) and a portfolio of short-term investment grade bonds. It was further explained that these were held in a segregated account in the name of the Fidelity Pension Plan held at Morgan Stanley in New York. The remaining 40% of assets was invested in a portfolio of liquid shares and equity funds. Since the Plan was cautiously positioned and had a high proportion of its assets invested in cash and bonds that shouldn’t have declined in value during this crisis, the members of this Plan ought to suffer much lower losses than the stock market. So contrary to the social media gossip, it seems that the opposite pertains.

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  8. Anonymous says:

    Well my maximum withdrawal limit is 1,000 per day and I have been doing that for a long time. I have no faith in the financial system and even if the bastards invalidate my cash, then they can invalidate my gold and silver and if they invalidate that, they can’t take away my food….or can they?

    Some of you people who have children have made no provision.

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  9. MoneyNotSafeInCaymanBoBo says:

    ahah your funny is safe in Cayman because its segegated – thats hilarious. Nobody’s money is safe here – last year Chief Justice Smellie ruled that segregation doesnt provide account holders protection – just googled the stories on OneTradeX – account holders lost 15% of their account balances that were SEGREGATED

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    • Anonymous says:

      This doesn’t seem relevant….wasn’t OneTradeX was set up with IB as non-disclosed basis and therefore non-segregated basis? If so then the point is moot and people lost their money due to mismanagement that led to regulatory action in the first place.

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      • Anonymous says:

        So not true – the judge reviewed all the evidence and even admitted the assets were clearly segregated. However, he still allowed other creditors to go after account holder assets. Look at the judgement made by the CJ. That same precedent would apply to Fidelity. Its Caymans darkest secret… Investors assets are not safe in this jurisdiction. Even CIMA admitted in court this is bad for the jurisdiction. Not sure what your support is to make the claim to say OTX was non-segregated other than just guessing what you think occurred. Do your research!

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        • Anonymous says:

          It sounds like there was some but inconsistent segregation resulting in significant costs establish what were and weren’t segregated. But really was it the judge that caused the mismanagement OTX and ultimately the loss or was it someone else? If someone else did that party offer to pay the fees out of their seemingly unearned fees? If not maybe that is where you should go for compensation.

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          • Anon says:

            Not saying judge caused mismanagement. Based on initial comment – just saying “segregation” does not = safety in Cayman. That is all. I agree 100% OTX was poorly mismanaged by a bunch of fools! Lots of people were under impression, regardless of mismanagement or not, Cayman’s regulatory environment and laws, would protect your assets as they were segregated. This is simply not true in Cayman as it is in other countries. It is just a risk that anyone holding assets in the jurisdiction need to be aware of when making decisions to place assets here… Many people were advised wrong by their expensive lawyers and accountants saying segregation means safety 🙁 🙁 🙁

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  10. PeopleMoneyByEarningAndLaw says:

    I don’t see why they are stressing on persons receiving their widrawal will “take time” because of the numbers. No one expects them to process 10,000 a day (just match COVID-19 daily tests).

    They need to put processing into perpective. 1). Employ more staff to deal with the extra emergency load.
    2). First in First out. There must be a set time to start turning out cheques.
    3). As long as the process begins, we know it will take time to complete but as long as persons know something is happening, they will wait their turn.

    4)With the prerequisites so basic, the pension managers should NOT be meandering around approvals.

    By Working Day 10, persons should have been approved already. One ALWAYS do better than the law when they are getting paid. By WD 15 cheques should have been going out. This is EMERGENCY…

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    • Anonymous says:

      They are not responding to applications period not even to say Approved or Unapproved. Are they the above the Cayman Islands LAWS? I thought the laws was for everyone and we should all abide.

  11. Anonymous says:

    Call it my paranoia but something about Hill’s choice of words doesn’t fill me full of confidence. “it’s fine”..I hope so.

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  12. Anonymous says:

    Obviously you have no clue how investment withdrawals are processed. If a member chooses to apply when the markets are low, that is the choice of the member, not the plan.

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    • Anonymous says:

      Obviously you are a pompous idiot…is it the day I request it or the day the manager chooses to record it? Is there even a unit valuation daily? Will manager try to take a subjective haircut for market movement on liquidation?

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      • Anonymous says:

        They are not valued &/or traded daily. Generally the NAV is monthly. The 45 day limit is to allow the request to be processed, trades at month end to happen to release cash , followed by the new NAV calculation & the amount to be paid to the investor (pension holder) calculated & for the payment to get made.

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  13. Anon says:

    Fidelity Bank has an excellent record in Cayman and there should be no concerns about accessing the pension fund for withdrawals. This will take time as with the other pension funds due to the large numbers involved, and the process in arranging redemption of investments so as to keep any losses to a minimum due to the current depressed state of the markets.

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  14. Anonymous says:

    If there was any pension plan that couldn’t redeem sufficient segregated/ring-fenced and non-marginable investments to meet a one-time 25% cash redemption, then that would expose a very serious governance and regulator issue, involving a sizable criminal conspiracy, which would necessitate multiple headline arrests and white collar criminal charges – not just at the institution, but also at the administrator, and regulator offices. Hard to imagine that kind of massive irregularity going unchecked by all the career professionals that would need to be involved to pull it off.

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  15. Anonymous says:

    Stocks are rising in the US…. so are our pensions gaining?

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    • Anonymous says:

      Yes, provided the stocks your pension is invested in are amongst those rising. Some are losing value. Think cruise lines/hotels/airlines – any companies severely impacted by Covid 19

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    • Anonymous says:

      If persons allow their funds to remain long enough, then yes, if they choose to panic and withdraw before the gains return, as all markets do, then they will be pulling their funds at the lowest value

      • Anonymous says:

        Easy fear monger…what about alternatives like paying off a car loan or mortgage…guaranteed 6% to 13% pa.

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        • Anonymous says:

          The banks are going to make a fortune from the mortgage “holidays”

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        • Anonymous says:

          Agreed… My solatlr panels going to put $200 back in my pocket monthly… There wont be any administrator to get at that nest egg.

          Any remaining balance I’m putting in a large mutual fund run by a big investment house like Vanguard at close to nil management fees.

          A good day is coming the end of the pension scam in this country replaced by something much better self directed investments with proper investment firms.

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    • Anonymous says:

      Maybe..it depends on when they choose in the apparent 45 day period to record the redemption….they may make it an earlier value date in a bull market and a later in a bear.

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  16. Anonymous says:

    I hope Director of Pensions is ensuring not only payment process but that the fair redemption dates (and thereby unit values) are being used. Don’t want undervalue of units at expense of withdrawing participants….certain pensions more prone to this manipulation.

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