Gov’t rejects MLA review of pension regime
(CNS): Problems with the Cayman Islands private sector pension regime became a political football on Thursday, when the government rejected a call to establish a committee to take a deeper a look at what can be done with it. Opposition MLA Chris Saunders (BTW) had presented a motion to the Legislative Assembly calling for members to examine the inadequacy of funds and the impact of the recent major withdrawal.
Saunders argued that, although he supported the move to allow people access to their pension fund and a holiday on the mandatory payments into schemes because of the COVID-19 pandemic, this will have made a bad situation worse. He said that all elected officials had an obligation to address what is bound to have a long-term detrimental impact on the people.
“We need to accept that the changes that we have made have added to the challenges and we are duty bound to fix it,” he said about the amendments to the Pensions Law. He added that a committee would allow members to examine all the documents and information to assess the best way forward for the failing regime.
He also urged consideration for disability benefits as the social safety net in other countries to assist people who become ill is not available in the Cayman Islands.
Saunders accepted that this administration was coming to an end and the LA would be prorogued by March, which meant it was unlikely the committee would finish its work, but he argued that it could at least get the ball rolling.
However, Premier Alden McLaughlin rejected the idea outright. He said he was no defender of the current system and pointed to his frequent past comments about the need for a radical overhaul of the entire system, which was misplaced from the start. But he said government was finalising a new board, which would be tasked with recommending future policy changes and that now was not the time to deal with this subject.
The premier then switched to campaign mode and attacked Saunders for his suggestion by implying that it would having a chilling impact on the business community at a very challenging time. He suggested that people would take this as a signal government was increasing the cost of business and would undermine the hiring of Caymanians.
He said the opposition was “constantly banging on” about protecting local jobs and they needed to be consistent in their message.
“If businesses go out of operation, there will be no jobs for anyone,” he said, as he accused Saunders of trying to put more pressure on businesses. “Timing is everything,” he added. The premier outlined the problems businesses are facing now and said that what happens in 20 years time is not pertinent, before he criticised the opposition’s attitude toward economic management.
The debate then deteriorated into a political slagging match, as opposition members jumped to Saunders’ defence, pointing out that he was not suggestion anyone should increase pension contributions, merely that the situation had to be examined.
As he wrapped up the presentation of his motion and expressed his disappointment with the way the premier had responded, Saunders pointed out that allowing an unelected board to review the situation rather than having the elected members of the LA shape new policy was a terrible choice.
With the removal of $400 million from the funds and the temporary cessation of payments into them, on top of the continued economic challenges ahead, the pension regime, which has been consistently criticised, is unarguably in desperate need of change.
When employers and employees are asked to make payments again when the pension holiday ends in the New Year, it is likely that many will not have the funds to do so. This means this issue will inevitably become a campaign question, where candidates will be asked if they support the idea of a national pension scheme or patching up the failing private sector option.
I think all matters regarding employer/employee laws and regulations should be reviewed periodically, whether or not any changes come out of each review. Its always useful to take a fresh look at things, in case circumstances, conditions, and working practices are changing over time. The same should apply to the pensions law.
Why the govt can’t begin the review process now, is beyond understanding. They say the govt will change in a few months so there’s no point starting anything now. But these MLAs are still drawing a salary; if they can’t or won’t act, why not stop drawing a salary too ? They can appoint a committee of experts (which means no MLA would be involved); a committee would not need to stop for an election, unless there is political influence.
So many things wrong with pensions, yet no-one is prepared to lift a finger, especially MLAs who have a gold-plated pension and have no worries about their future “pot”.
Pensions are, by their nature, good for the individual and good for the country. It is a form of deferred pay and needs to be factored into any job cost.
It is good for the individual as it allows them to have money when they can no longer work. Yes there will be competing calls for your money but by the time you can no longer work its too late. The very fact that it cannot be accessed (except in specific circumstances) until retirement is good. The problem is we need to make sure people have sufficient funds for retirement and there will be many people who dont but money does not grow on trees so the earlier your retirement saving start the better.
It is good for the country because there will be less reliance on state aid (in whatever format)in retirement. For those of us who are ex-pats the ability to take your pension is a good thing BUT there should be conditions around it such as an inability to apply for PR at any stage in future to discourage churning etc.
The debate on private sector v public sector pension is a red herring. Ignoring the close Defined Benefit section of the civil service pension (as it is closed to new entrants) there should be a minimum level of contributions across the board, maybe with incentives for putting more into the pension, but each employer has the ability to provide additional pension benefits above the minimum. There is already a sort of Pensions Regulator in the National Pensions Office and they can be used to ensure members of the private sector pensions receive value for money. It needs to be considered what their role is and what the role of the private sector providers are (my view is to provide value for money pensions and there should be consequences of they fail to deliver).
There is a vast number of design issues that would need to be addressed and having a review is needed but fundamentally there needs to be an acknowledgement of the value of pensions. There are so many areas that I could touch upon but this is not the forum for that.
I believe the Pension Law needs another review but I agree with Premier Alden it should be after a new board is selected. Those MLA,s that are in power then can lobby for the changes they would like to see and hopefully there will be new ministers in charge of Private Sector Pensions. The 2016 review with 51 amendents to Pension Law was nearly all against the poor employee and there was nothing about better management of the funds.
the penison law is joke the law state that when you get married how you married to can only be give for when the married start and i devorce and judge give her money out my pension like 10 year of pension pay to her that money i made over 10 to 15 year of my money that she should have not be liable to be pay . the law in the Cayman islands is not follow the international law standard. how could the judge approve and payment she should not i have gotten if law states, she can only get from when the mortgage started. the judge pay her a ilegal payment out out my pension my lawyer told the judge that is ilegal and he still approve her to get money that law state can not happen the judge did not follow what the pension law standard is. he just take over 24k out my account and pay a convent married if law can be breaking my the judge why is there a law in the first place this is ilegal and still take my money ilegal
The Premier Alden McLaughlin has responsibility for pensions.
He has failed in that job, since 2005 when he became responsible, he has forgotten to appoint new board members for 3 years. So during those three (3) years there were no Board meetings to oversee the status of about $1 BILLION of employee’s pension funds.
Premier Alden McLaughlin has always totally failed when it comes to caring for the interests f Caymanian employees.
Premier Alden McLaughlin only cares about sucking up to the UK so that his lackey, HE The Governor Roper will ensure he gets his Sir Alden McLaughlin Knighthood in the Queen’s Honours List.
The “silly season” has begun.
Everyone that voted against this including alden needs to go in May 2021. This is something that the majority of people in the private sector want and alden just shoots it down with the help of his “yes” men.
Alden, can you explain to me, why I should vote for you or any of your cronies?
I am done with this so called “unity” government. The only thing were these unity is among them and for all the wrong reasons.
Why should Govt worry about the private sector when they are wallowing in free goldplated medical treatment and fat cost of living adjusted pensions all paid for by the taxpayer.
Got Gold?
The only way to solve this private sector pension fiasco is to allow the civil service to take over all pension plans.
While we have been seeing negative interest rates in our private sector pensions the civil service pension funds are receiving double digit returns.
We have to face the music the civil service is now more efficient and effective than the private sector.
Look at public sector departments that are not doing well. Offreg Turtle Farm Cayman Airways they all have one thing in common a private sector led board.
Face the facts as hurtful as they are to the negative posters.
I am not sure if people are aware but if you pass away your pension is not immediately passed on to your heirs They have to wait until they are retirement age in order to start collection their inheritance. If I am incorrect please let me know I was told this by a pension administrator.
So what are you planning exactly?
That is incorrect. Contact the DLP for clarity.
I personally think it is an impressive “Motion” that the member made…maybe not now…but to consider in the near future. I agree with his thoughts on the “Regiment Bill”…he agreed with the initiative, however, he had concerns of the costing at this present time. (“Conservative Minded” and Futured Minded”).
Pay attention folks…analyze for yourself…do we want legislatures to help manage the Islands, it’s people and visitors alike…or do we want spenders with big budgets…that is living off the people backs, by having such a “high cost of living”..we pay taxes buddies.
There is no free lunches folks…pay attention and cast your votes with sound judgement, come 2021.
If Mr.Saunders was to now forward a “Motion” of having a “National Vote”.
For us to survive, we have to rid our islands of this OMOV and its slackers. They set us up for their benefit, not our children’s.
Correct me if I am wrong on this but isn’t OMOV the norm in other countries, even more progressive countries. What exactly is your problem with OMOV? I believe this system forces the members to do the work!, i.e., as much as they can considering it is difficult to get the government to attend to the basic national issues in the districts with elected officials from the Opposition bench. The government acts as if the funding is coming from their personal account s.
You are 110% correct, it should be better and force them to do better. However, it has also allowed them to do the opposite: not take responsibility of anything that doesn’t fall in their constituency, do less for their own area or the nation in general (no incentive to do so; assign blame to others for any downfalls), and the courtesy of having to only convince 300 people or so (a majority decreased from about 1 thousand voters) that they are doing enough to get back in for another term, with unfulfilled promises and grandiose goals that are seldom met for everyone as bait.
In most democratic states, motions like OMOV logically work and hold candidates accountable. However, the problematic incumbents amongst the elected have manipulated this in their favor to not only pass it but are abusing it.
Because the Caymanian society is so relatively small to other nations, being outspoken on the status quo is heavily criticized and ostracized in public, even if the majority of people are negatively affected. Most are reluctant to voice their concerns because they are unsure others will also publicly stand with them, not to mention the group of foreigners and/or the friends of certain incumbents that are living comfortably who dissent these concerns or even acknowledge they exist for anyone, which appear to have more social influence on these politicians than the locals and the assimilated have.
This fear also discourages any eligible potential candidates that will push for changes from running as well (albeit GTC Bryan’s bravery to push for the OMOV’s ideals mentioned), as any failure to achieve election or accomplish airtight victories is used by these dirty politicians to mud-sling at character, family members, and any rights to privacy thereafter. Meanwhile the same corrupt and anyone in their sphere are afforded cover-ups and justifications for anything they do; especially criminal conduct which would normally disqualify politicians from candidacy in other nations (currently not a legal stipulation of candidacy for office here, sadly).
As a result, most suffer in silence until an occasional grassroots wave of people speak up, then everyone feels comfortable to chime in. (e.g. the closure of Cayman27, the last local television station that actively voiced community concerns and held bad actors to account; most people talked publicly for about 3 weeks then conversation fizzled; frankly am still upset).
I think most Caymanians are ready for change, but their concerns are being ignored or not met and cause most to resign to the cause or give up on any kind of fulfillment in their lifetimes. There is no clear line between locals and contemporaries, so everything (including basic rights for locals) has been left up for grabs to the highest bidders without airtight protections by law.
Every time these self-serving politicians are feeling the election pressure that the jig is up, they somehow find some way to secure the votes for another term and we are all back at square one to try again next time.
I surely hope this upcoming cycle is different in May because something needs to change (either by candidates, rules of candidacy, or realignment to true democracy not oligarchy) before it’s too late to turn back.
Seems like the pension dirt runs deep like multiple layers of administration, the unclear trustee zig zagging the OTs, lawyers, auditors, regulator and now seemingly politicos that don’t want to be found with their cloven hoofs planted and snouts down in it. No surprise Alden exploded… Terrible idea to explore our fiasco.
Is it any surprise you can only withdraw 1,000 per month hardly? A lot of animals need their fees for ever and ever amen.
This is so easy, and they cant manage to do it. There are many, many tried and true ways to set this up and proven, low cost fund managers. Every large mutual fund manager in the world has multiple plan choices to pick from, with very low or zero expenses, daily or real time balances, real time stock or fund purchasing, daily balances, etc. Your only real issue is your need to control withdrawals because the participants are not volunteers and are being forced to contribute. The big managers can handle this too. It needs to be all with one big operator not multiple midgets. Forget the local banks and funds, they don’t have the expertise or the horsepower for this. If they had been doing a good job, people wouldn’t have rushed to pull $400 million out. If you choose a good operator and plan, get rid of the ultraconservative investment restrictions.
You see how fast they can change the law in covid. This could be fixed tomorrow! They don’t want that….lots of skimming off the top by lots of local players
Explain how the private sector pension is a disaster and the public service pension is world class.
Who do we blame for this.
Private sector pensions are a POS…agreed. Most sensible people have long realized though and have looked elsewhere to save for retirement. Public pensions are “world class”? Seriously?? Your benefits are secured only because of government’s ability to tax my children and their children etc
You were going good until you started to talk the usual shit about taxing to pay public service pensions.
The public service pension fund is separate from cig finances.
As with the private sector schemes – public sector employees contribute and the public service organisations do the same.
I think you may be speaking if the civil service where there is a different arrangement.
2:02 jealousy is a serious thing.
5.15pm And sitting here on 1,000 a month ‘pension’ when I should be out working just as these MLAs are allowed to do. And not allowed to draw more than that and not allowed assist from Government. And how you pay health insurance from 1000 a month? Someone in government needs to answer these questions! Do not work in private sector and stay in Cayman, because nobody will give a crap about you!
They better review withdrawals and work permit PR period and consider placing moratorium of work permits for them and in general.
That way, Sanders’ “people from Ja” and people here from other countries, will be able to enjoy few years of employment, stable society and return home.
As usual the businesses and families who want to bring friends here will start with scare tactic that no one will come here for 2-5 years.
For once, MLAs call them to the bluff for your own sake and your grandchildren that will eventually have to pay the cost social and financially for the population growth through immigration work permits.
The whole misguided purpose of establishing self/corp-funded pension savings plans was to limit the future drag on public cash for social assistance. You can’t complain about the former, while proposing the latter. Pick a lane, man. The only reason the former doesn’t work, is because performance and any compounding over time is eroded by antiquated portfolio allocation theory, and unchecked predatory administration fees. If 50% of the plan portfolio is in fixed income, earning avg 0.5% per year, and you deduct a 2% admin fee, the portfolio loses 1.5% a year. The best chance is to let Caymanians choose to take it all out, and self-administer their amalgamated retirement plans.
If you want a welfare state you need direct taxation. Your choice Cayman.
But pensions are always going to be necessary. No-one saves enough for old age, except for the small proportion of Cayman families who have a disproportionate share of the local wealth, and they don’t need pensions.
Ive saved. Some people dont need an authority to direct them to budget, live below their means, put away at least 20%. The hard part in Cayman is not having any kind of valid inflation factor. The 2 or 3% govt admits to each year does not seem to include for anything affected by fuel…which is everything. Ive seen things go up here 15% within the year. So how the heck do you set a goal amount and know if it will be even near the cost of living here in 20 years?
Direct taxation is coming next year. We have no choice keeping tourists out and CIG revenues dropping dramatically. This time next year there will be no choice. Direct taxation coming for all.
It need to change to one National pension plan. Shut down all private pension companies. Private pension companies are daylight robbery and don’t care people who paying pension plan.
This is mainly true of the ones you picked. Just pick a single one of the big boys with a track record. You will need to do this even if you have a national plan because CIG is not capable of it.
Nothing is a good idea to Alden unless it’s Alden’s idea
Wasn’t Alden the big boy, who said during his campaign, that every Caymanian would get a job? Do the people understand his twisted tongue? He says/makes noise about the things people are upset about and at the end, when he has fooled them, he back tracks. Ask him how many laws his government passed in favor of Caymaians? None! Every law is against the indentured slaves, so the Johnny come lately can ride the horse to the ground.
I hope the people vote, remembering that bias that has put his people last, with only promises.
Turn the page come May 2021.
This government have no real plans to addresss any of the real issues affecting Caymanians right now. Vote them all out
How could Alden style up him good good friend Chris so? Big Mac mussa been laughing hard!
The Premier suddenly pretends to care about business costs after shutting down Cayman because he has the power to do so. SMH
Alden Mcliaghlin and all of his motley crew of yes men need to all go in 2021 and retire to his farm in EE
Emperor Alden is in full campaign mode. The people of Red Bay need to remove him as a MLA so his tenure of games and ego driven rhetoric can finally come to an end.
My ballot in Red Bay next May will read:
[ ] McLaughlin, Alden (Progressives)
[X] Any other civil-serving competent politician
I am so tired of the drama series in the Legislative Assembly and the disastrous, greed-driven direction this nation is going in!!