‘Culture change’ needed on private pensions

| 17/06/2020 | 70 Comments
Cayman News Service
Chris Saunders (front row, right) addresses PAC

(CNS): Public Accounts Committee member Chris Saunders made it clear to regulators today that the culture surrounding Cayman’s mandatory private sector pension funds needs to change. Saunders, who has been a vocal advocate against the system, said the Department of Labour and Pensions (DLP) did not have the resources to police the plans where administrators were “taking as much as possible from people’s pockets”.

The PAC met Wednesday morning for the start of a three-day hearing, in which members will examine the recent release of a batch of annual reports from the DLP, which had not released any since before the financial crash in 2008 until forced to do so by the Office of the Ombudsman.

Based on a catalogue of excuses, from changes in the law to different priorities, stretching back over the last decade, the reports were not released until a freedom of information request succeeded at the appeal stage and the ombudsman ordered the department to release the reports.

On 22 May the DLP released the completed reports, which only went up to 2016, leaving a backlog of three, and soon to be four, reports outstanding, even though by law they should be released to the public every year.

The reports are meant to outline the work of the DLP in regulating the private sector pension system and the broad details of how pensions are performing, with relevant statistics.

The reports reveal a catalogue of discrepancies over the amount of assets under supervision to the tune of CI$100 million, issues over the transparency of the performance of some schemes and numerous other problems.

Saunders said the reports were not composed, as they should be, through the “eyes of the public”.

Taking on much of the questioning, on behalf of PAC, of Amy Wolliston, the DLP deputy director in charge of overseeing pensions, and DLP Director Bennard Ebanks, Saunders fell short of directly blaming the two senior civil servants for the poor level of regulation.

But he called for a “shift in culture”, not just from the pension providers but the regulator as well. He suggested that regulators can “sometimes get too close” to the people they regulate, in this case the pension administrators, and “forget that they work on behalf of the people”.

Saunders pointed to the fact that there were two distinct elements to regulation of the current dysfunctional system. On one side there is the administration and compliance with the law and on the other the investment, which, given the size and complexity of the system now, should be handed over to CIMA, he said.

Saunders was particularly concerned that a significant number of the pension companies and their administrators, though not all, were not only badly managing the pension funds, even investing in competitor jurisdiction projects against Cayman’s best interests, but were ripping people off.

“They are hell bent on putting their hands in people’s pockets and nickel-and-diming them on every cent,” Saunders said. Furthermore, he noted that some providers were taking very high fees from their members even when they were losing their money.

Saunders said the reports had to be released on time in future and that the regulators should be watching what the funds were doing in real time, because it was too late to change anything after everything had gone south.

He pointed out that the reports before the committee, the most recent of which is already four years old, were essentially meaningless.

See Wednesday morning’s PAC session on CIGTV below:

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Category: Government Finance, Government oversight, Politics

Comments (70)

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  1. anon says:

    How do I get in contact with the Wyvern Retirement Fund Pension. I’m a former Butterfield employee and for years I have been trying to figure out how to relocate it to my current provider. Now I just need the cash. There is no contact information on my most recent statement sent in May, however, the NAV is reflected as at 31 December 2019? Please help me. Called Butterfield but they have you on hold, you repeat yourself over and over until your credit runs out and you can’t call again until you top-up, only to have the same thing happen to you. This sucks!!!!!

  2. Anonymous says:

    Why not demonstrate on Alden’s lawn until he fixes it?

  3. Anonymous says:

    There is simply no need for more than a single 401k style provider in Cayman. CIG could easily white label a US provider giving us a first class investment mix, self investment options and proper online management tools. Cut out the ridiculous parasitic middle men.

  4. Anon says:

    Caymankind corruption, inefficiency, greed and rip offs….why should we expect anything else?

  5. Anonymous says:

    Allowing self-direction to over-ride archaic pre-2008 age-defined investment mix dogma would be nice ie. if I could have the option to go full equity/alt investment mandates I should like to do that – and if I want to throttle back to cash/money market, that should be an option too. I had thought BritCay allowed more self-direction flexibility, but my pension move enquiry was met with crickets. Does any other provider allow any kind of self direction, or portfolio discretion?

  6. Anonymous says:

    Must be nice to not produce mandated annual reports for over a decade and still keep your job.

  7. Anonymous says:

    Saunders is on to them (pension providers and CS) yes put it with CIMA they are above board

  8. Anonymous says:

    What is so shocking here is that it appears that none of these Pension Providers seem to be operating within the confines of the Pension Law. What is even more shocking is the Department of Labor and Pension are not operating within the confines of the law themselves..

    How do we expect to get any help from the DLP when their salary and pensions are untouched by the Government and they don’t even participate in one of these scam pension programs? Why would they care if we made money or not? They keep their cushy jobs unless someone calls them out and even then they are just reassigned to another department…Ridiculous!!!

    I’ll bet if this was happening to the Public Service Pension and Alden and gang were losing hand over fist like this, it would not be allowed to continue..

    He who feels it knows it…we feel it, they don’t!

  9. Anonymous says:

    Those crying for one plan, why do you expect it to be well managed?

    Providing someone with a coercive monopoly generally discourages working efficiently or caring about the cost to consumers. As examples, do you believe the Department of Licensing is efficient and does CUC care about the costs to you?

    Regulation is need, but throwing all of your eggs in one basket generally isn’t the best plan.

  10. Just me. says:

    This and many other problems here are from a “culture” of corruption that permeates into everything Cayman Islands. You can not fix anything until you fix that. Just plan on everything getting a kickback to CIG and everything becomes easier to deal with..

  11. Anonymous says:

    Here’s a suggestion, do like other countries have and regulate the plans. Simple things like set the maximum investment fees to 0.75% unless the plan outperforms returns of 4% growth per year (including all costs), so if the plan outperforms 4% growth they can take an extra 0.25%, capping the charges to 1% max…if this is too high 0.50% and 0.75%. Set the maximum they can charge for admin tasks, like statements, withdrawals, wires, drafts. Remove the 60/40 split on investments/cash and tailor plans for a lifetime, so in your 20’s you can get 90pct in stocks/10pct in cash, in your sixties 10/90 to safeguard your investments. Make sure everyone pays in to the plans. Make transfers out to other plans easy when you leave the island. Change the retirement payouts from 12k per year. Maybe start a Government plan that everyone pays into, nothing too much, say 2% of salary, no cap on amount or exemptions, then use this to have a ‘state pension’ of $100/week, yes this will be very unpopular and unfair, in that you are expecting expats to fork out money that they will never see, but if you don’t then we will never change the problem. Cayman is too expensive for all but the wealthiest to retire in, retirees will either be a drag on their families or Government through NAU, Cinico etc. and saving 10% for 20 years wont get you much either…the final option is to get elected, do a 4 year stint in Government and get a retirement plan paying out 35% of your salary in retirement – in the real world this would take a pension pot of close to $1mio to get that sort of payout…not bad for 4 years work.

    • Anonymous says:

      1%? All they are doing is buying the index. 1% for 40 years is 50%… let me invest it myself thanks.

    • Anonymous says:

      Otherwise known as a tax.

      • Anonymous says:

        Nope. Here it is referred to as fees or “duty” Remember Cayman has NO tax. But it is one of the most if not the most expensive places to live because of the impressive fees and duty.

        • Anonymous says:

          Not true. Our duty rates are broadly comparable with VAT charged around the world. Granted, duty is charged on more things things than VAT but you pay for it out of otherwise untaxed income. Would you rather pay duty/vat at 20% or lose half your paycheck to income tax before you even get it?

  12. Anonymous says:

    CNS, can you ask at the next press briefing if the Government is aware that some pension companies are not using the May NAV and one in particular, Britcay is still not making payments which is a violation of the law? They do not return emails or phone calls. Also why is the DLP telling me that I must be patient because they are very busy??? Aren’t they supposed to be policing these rogue companies?

    This was all good when it was offered but there should be at the bare minimum a notification from Britcay advising/apologizing their customers. Why does the Government continue to let them flaunt the law?

    • Anonymous says:

      I have emailed BritCay twice to see if they would accept a pensions transfer from another plan – never heard from them! They are 404, even on new business.

    • ANONYMOUS says:

      Almost certainly because BritCay is just a “puppet” operation with Colonial Group in Bermuda pulling the strings – Cayman makes no major decisions, including how pension contributions are invested. I have known many people whose pension funds were purportedly with “BritCay”, who periodically were horrified to find in periods when the Stock Markets we’re down, that the value of their pension account was barely more than the amount of their contributions over a considerable number of years, with no real Capital growth.

      • Anonymous says:

        2.31pm Once Bermuda is involved it’s not a good thing. The Wyvern fund produces December 2019 statements in June 2020. What a shock of surprisation as we say in Cayman when members get an up-to-date balance. Glad I’m not one.

    • Anonymous says:

      If they are going to charge us, the very least they could would be to send us a statement so we know how much they have taken from us. Britcay in my opinion has been caught with their pants down and are doing everything to avoid their clients.

  13. Anonymous says:

    Have you ever tried to get Amy on the phone?
    “Oh sorry she’s not at work yet but please leave your name and number and I’ll let her know you called.” Call back, “Oh sorry, she’s gone on a break, I gave her your message though.” Call back, “Oh sorry, she’s gone for lunch. She’s really busy today but said she will call you before the end of the day.” Call back, “Oh so sorry but you just missed her again, she’s gone on her afternoon break.” Call back, “Oh sorry, she just left for the day, I’m sure she’ll call you tomorrow.”
    Day after day this continues until it’s, “Oh so sorry, she’s gone on sick leave for an unknown amount of time and we don’t have anyone else that takes care of her responsibilities. What was that? You want to speak to the Director? Oh so sorry, he’s just gone for lunch but I’ll leave him your name and phone number and I’m sure he’ll call you back before the end of the day…”
    This is how you get so many years behind on your annual reports and basically get paid to do nothing for years…a needed culture change is an understatement!

    • KMan pension says:

      These reports are old and the Deputy was the supervisor of pension all along and should be held accountable. There were two or three other Directors before Mr. Bennard Ebanks.
      I don’t know him but from what i understand he only joined in 2017. Is this why they pushed the previous Director and one of his Deputies out. Both went to other Government Departments.
      Let focus on the positive and get the other three outstanding reports now. When can we get them?

    • Anonymous says:

      I don’t know anything about the recruitment process, but a lot of these senior public official roles are given out as rewards for political favors with with understanding that the credit card bills won’t be scrutinized and no actual work will be required.

      Do you ever feel that what is needed here is less of a “culture change” and more of a protest movement like we are seeing wordlwide? Only not focused on the police but on the wicked, evil, corrupt and lazy politicians? I wonder if Mac gets acquitted that might set the whole thing off like a strong wind on Mt Trashmore.

    • Anonymous says:

      I have had numerous email discussions with Ms Wolliston and found her extremely willing to help and very professional.

  14. Anonymous says:

    A little off topic but has anyone been paid by Britcay pensions as yet?

    • Anonymous says:

      Not yet, but ST and Chamber have paid.

    • Anonymous says:

      I don’t think you are off topic..I am still trying to get them to answer and email and the only thing you can see on their website is the March statement. About a week ago they deducted my withdrawal from the March statement. This made me furious and I have emailed and called on several occasions and no one wants to respond. They have now set up automatic emails that direct you to send your emails to another email address. I did that and again no response other than another automatic response..

      Does anyone else have these same problems with Britcay?

      • Anonymous says:

        It appears Britcay has not paid anybody as yet, so they are already in breach in addition to using April NAV which is thievery, as May had even better returns. They suck!!!

        • Anonymous says:

          You are lucky, they deducted mine from the March NAV according to their website portal. I still haven’t gotten one thin dime but the funds have been deducted from my account for over a week now.

          Government needs to get involved with this Britcay issue…They seem to be the one with the most issues and their way of handling business by just ignoring people is wrong..

          I don’t even know what kind of recourse we have because I can’t even get them to give me a copy of the May statement..Would it have been such a big deal to just update the website(which by the way is atrocious) with the the end of May figures so that we could at least know what our balance is/was?

        • McCarron McLaughlin says:

          Wow the samething happened to me.

          My application was approved in mid May 2020, but the deduction was posted on the April 2020 statement.

          I’ve asked for an explanation on two occasions now and so far just crickets.

          Pension Administrators and the Insurance companies that own them are some of the most unethical companies around.

    • Anonymous says:

      Nope called today as today was the day for the funds to be in the account. Apparently they have over 6000 applications to put into the system to send out to the banks and said maybe tomorrow or monday… yea right we all need to start protesting because they going to string all of us around and may fool around and not put the correct amount in either.

  15. Anon says:

    How can a bunch of old retired police offices regulate 9 or 10 poorly managed Pension providers? Why do the employees have to pay 2% of their funds to be managed poorly by the providers. Cayman is too small to have more than one Pension provider. For a pension fund to be cost effective the fund should have 100,000 members. Cayman had 46,000 people of working age. The regulations have to change and there should be one provider.

  16. Anonymous says:

    After listening to the PAC meeting, it seems to me that this is exactly as we thought, a scheme forced on us by the government to make administrators a ton of money. I was astonished when Chris Sauders mentioned that one of the funds actually lost money in 2018/2019 while the stock market was going through the roof. Are you kidding me, if you can’t make money in the best of times, how can I trust you with my money?

    I don’t know if it is possible but the Auditor General or Attorney General needs to call for an investigation into this terrible situation. At this point, what should be done is to just give us all our money back and/or put it into the government pension and open up a National Pension plan. I know, I can’t believe I am saying give my money to Cayman Government but at least theirs is properly managed making money…All that we will receive at retirement is $1000 a month. $1000 a month barely covers my light and water bill.

    • Anon says:

      Anonymous @1.30 a.m. I agree with you wholeheartedly. But the Chamber of Commerce fraternity will eat you alive for your well founded thoughts. Did you see the former presidents response to the Premiers comments last month? The COC looks after their members first. The people like you and me are way down the pecking order my friend..

    • One Fund says:

      Most things not all in government is managed, some managed well. Things need to change, There needs to be only one pension fund where we can leversge our money together and get rid of these vultures and do the same with the health insurance.

    • Anonymous says:

      Part of the problem is the pensions law, this requires plans to invest 60% in stocks, and 40% in cash or equivalent, this means when the stock market rises you are barely getting more than half of that uplift, I don’t know how they lost money, but I know why they don’t make as much as they could. Imagine now with interest rates at zero your plan has to hold 40% in a loss making position (anything less than inflation is a loss). There are many issues with the pensions, and this is just one of them.

  17. Anonymous says:

    Britcay has still not paid out my funds as yet. I have tried on four occasions by email to receive a statement as the only one on their website is up through March. No one responds to my email. I call and they say someone will call me back. Now one ever does.. I reported it to the DLP and was told that I must be patient because the Pension companies are extremely busy…Is that anyway to enforce the law? I’m sorry but why set rules if the DLP is going to allow them to break the rules??

    My question is how the hell am I going to know how much I will be able to get back if they can’t provide me with a current statement for May? If they just deposit some arbitrary amount of money in my account how will I be able to know if the amount is correct?

    Alden should have just told them to give us all of our money back. Based on what came out today, putting the money under my mattress would have been a better way of investing.

  18. Anonymous says:

    If this department is in such bad state of affairs why is this woman Wolliston still in charge? If she’s incompetent then there should be consequences!

    • Anonymous says:

      I have dealt with her directly, concerning an employer who deducted pension and did not pay and she was extremely competent and knowledgeable.

      • Anonymous says:

        Did she report it to the police? Was it treated as the theft it almost certainly was? Did she take steps to have that employers licensing and work permit applications held up?

    • Concerned Caymanian says:

      if you listen to the testimony yourself, it is acknowledged by the Committee that there is need for further resources in the department. How can Govt expect someone to complete the work if the Govt does not provide the necessary resources? That’s not accountability, that’s a recipe for failure.

    • Anonymous says:

      The whole bunch of them from the top on down to the bottom need to be fired as they are to buddy buddy with these pension providers. How can you honestly justify holding up all these reports and playing dumb when asked questions. The whole situation stinks of rotten fish.

    • Covid Man says:

      Besides all the stated problems, one of the worst problems from the beginning of the pension law being implemented is the failure of the goverment to make all employers properly make their payments that in most cases they have deducted from the employee into a approved plan. Then after years of the non-compliance the guilty parties just walk away into the sunset perhaps just making token payments for the past due amounts. Doesn’t that amount to collusion between the goverment investigators & the employer? The whole system is rank with fraud, complacency and non compliance. Same goes for the health insurance.

    • Anonymous says:

      Cayman Culture.

  19. Anonymous says:

    …….Of course he “fell short of directly blaming the two senior civil servants for the poor level of regulation”…..that would mean knowledge of and use of, the terms “responsibility” and “accountability” and we know that the CICS is never responsible or accountable for anything nor are their “political SERVANTS”, in the CIG.

    Which politician wants to take on the greatest “union” of voters on the island. NONE of them. ……and even more infuriating – worst case for any sub-standard no performing senior member of the CICS – early retirement (none or ever fired), on full pension and benefits with medical coverage for their families for ever and a day. …Oh…and a lump sum.

    The private sector is the deep pocket that is drawn upon, repeatedly, to pay for the “education fees” for those in CIG and CICS.

    • Anonymous says:

      Quit trying to deflect the criticism away from lousy pension investment management, and perhaps a law that needed amendment to allow more investment in higher-earning segments, and blasting away your generalized diatribe castigating the civil service instead. Keep the criticism sharply focused on the source of the problems, if you really care about making positive change!

      • Anonymous says:

        Lack of accountability and zero consequences DIRECTLY leads to continued sub-standard work product – including a poor Pensions Law, amongst the many wrongs with CIG and the CICS.

        That is the point – obviously, way over your head – which probably isn’t hard, given that it appears to be buried in ground level turd.

  20. End_Privatization_of_Pensions_Plans says:

    This week i asked my pension provider, MUFG what the fees are to withdrawal? The refused to disclosed the amount and said they just charge a “”Emergency Withdrawal an administrative fee”. I have been hearing some providers charging $1,500 – $2,000. How does the law in Cayman allow pension providers to not disclose their fees until the action/withdrawal has been completed. I asked DPL about this and received no response.

    This problem is shared between both CIG and the poor laws they enact and the greedy and unethical pension providers.

    • Anonymous says:

      It’s a $50 charge to cover the additional resources to process the 1,000’s of applications received in the space of 4 weeks.

      Pensions are not designed for mass withdrawals at the whim of the government.

      If the person doing the withdrawal doesn’t cover the transactional charge then those costs are absorbed by the pension holders who didn’t withdraw.

      • Anonymous says:

        …and cover wire payment

      • Anonymous says:

        $50 is reasonable. I agree, that those withdrawing should be covering the $50 cost and not all plan members. But is $1,500 – $2,000 a reasonable fee? I have heard this from a few people so far that they have been charged this… Tried to get assurances out of pension plan administrators, but they refused to disclose the dollar amount of the “”Emergency Withdrawal an administrative fee”.

        I also agree pensions not designed for mass withdrawals. The point the other user is making i think is that the $1,500+ fee is not reasonable.

        If it is $50, that is cool with me. But i am not cool with myself or any other Caymanian or other being charged this fee on Island.

        I think everyone would be happy for the pension plan administrators to come out and formally say nobody is going to be charged more than $xx for a withdrawal. Then there is no more debate or false information.

      • Anonymous says:

        Are you kidding me? They have been taking excessive fees from us even in times of loss which in my cases as been year in and year out. They have been caught with their pants down and now this is their way of punishing us when we are down.

        We should have been able to withdraw the entire pension. Trusting these people to manage our funds the way they have been is like throwing out hard earned money in the garbage.

        These situation has proven to us what we already knew and the Government keeps sanctioning their behaviour instead of shutting them down.

    • Anonymous says:

      Your spewing nonsense. Nobody is getting charged that.

  21. Anonymous says:

    Is anyone really surprised?????

  22. Anonymous says:

    Shocking, useless incompetence from the CIG.

    WTF do Bennard Ebanks and Amy Wolliston actually do all day that means they are a DECADE behind on their to do list? I’m guessing it involves a lot of lunches and travel and not a lot of anything resembling work.

    In a real country they would be sacked along with the government minister responsible for such an embarassment. This place is despicable.

    • Anonymous says:

      Who is the Chief Officer in the Ministry?

    • Dianne says:

      It is Amy Wolliston that worked on the new changes to the law. Most plans are starting their payout this week because she has guided them. You should thank her for her hard work!

      • Anonymous says:

        I sent her an email two weeks ago with one simple question, why is a particular pension provider using April NAV for an application submitted in May? I have yet to receive a response or acknowledgement. These are the simple things that make her/her department appear incompetent.

        • Anonymous says:

          I wrote to her regarding Britcay using March Nav for payouts and it took her 10 days to respond. I still have not got one red cent from them but I can see online where they deducted the funds from my March balance..

          When this is over the DLP needs to audit everyone of these Pension Providers and in particular Britcay. I am now 3 days past the 45 days for my payout. No one is policing these providers and they are continuing to fleece us with the DLP’s assistance.

          • Anonymous says:

            I agree with you completely. While they all have flaws, Fidelity & Britcay seem to be the worst. I’m with Britcay and I can see where they deducted my pay out from April stmt using April NAV when I applied in mid-May. I sent this same query to Amy Wolliston and she has never responded. These people are getting a salary just to warm seats. Somebody in Government needs to grow a pair and start firing these useless folks.

    • Anonymous says:

      Cayman Culture. It needs to change. But it won’t.

  23. Anonymous says:

    Alden, that another one of your direct areas of responsibility? You pension is all cool though, right?

    • Anonymous says:

      Of course as you know he works so very hard!

      • Anonymous says:

        bleeds the same too…they are not worried about us. they continue to get their full fat salaries and don’t have to participate in these private pension scams..

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