Pension payments due in November as holiday ends
(CNS): The national pensions holiday came to an end on Friday after two and a half years. Private sector employers and employees as well as the self-employed must resume the 10% mandatory contributions to funds as required by the National Pension Act. The first payments are due by 15 November for wages paid in October, and then every month going forward. The end of the holiday comes as inflation is around 12% but with no increase on the minimum wage, and just as the government’s temporary summer subsidy on CUC bills ends.
The pension freeze on payments was introduced by the PPM administration a few months after the enforced closure of the borders as a result of the COVID-19 pandemic. It came alongside the decision to allow people to withdraw money from their existing funds to help them navigate the economic fallout from the mandatory lockdown and continued economic uncertainties.
But with well over CI$400 million withdrawn from funds and a freeze of payments, private sector workers are now faced with a hole in their retirement cash in a system that was already seen as inadequate. Last month Finance Minister Chris Saunders revealed plans to gradually begin increasing contributions, starting in January 2024.
Saunders has ruled out nationalising the system under the successful public pension system that funds government workers’ lucrative retirement income. But he told CNS last month that he wants to see more people have access to that scheme and still believes that having some ten private pension companies in such a small jurisdiction “is ridiculous”.
He said his ministry is undertaking an actuary report of the current state of private sector funds to find out how they have been impacted by the withdrawals and the two-and-a-half-year holiday on payments.
In the meantime, employers and workers will need to dig deep over the coming week to find the money for the resumption of compulsory contributions.
Cabinet has exercised its powers and issued a new order to expressly indicate that the maximum pensionable earnings for the remaining three-month period of 2022 be on a pro-rated basis. The proportioned figure is CI$21,750, which represents 25% of $87,000, the maximum pensionable earnings for an entire year.
“The National Pensions (Maximum Pensionable Earnings) Order, 2022 has been approved by Cabinet in order to provide clarity for the working population and their employers on the amount for which pension contributions are due for the remainder of 2022,” said Deputy Director of Pensions Amy Wolliston. “Employees and employers are reminded that any contributions paid during the pension holiday were considered voluntary and are not included in the 2022 earnings maximum.”
Questions about the end of the pensions holiday can be sent to the Department of Labour and Pensions at DLP@gov.ky or call 945-8960.
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During this “Holiday”, my pension account lost almost 12% of my retirement fund. If a company has a track record of not investing properly, they shouldn’t be allowed to start receiving new money. Who is looking out for us? As many have said, the restriction of only getting 1k a month is not sustainable! Even people being helped by Social Services get more than that. This is our money, isn’t it? How can a company dictate this, then also make bad decision on where they invest? Government wants us to rejoin this scam? Please stop the bleeding of our hard earned dollars.
People should be allowed to present their business case to a board showing what they would do with their pension money to secure their financial future instead of being strong armed into giving it to faceless companies that don’t guarantee anything.
what can be better than being forced to hand over your money to a group of people to play with and if they win big they become rich while you get peanuts and if they lose…. you still get less peanuts.
I am watching people lose 2-3000 dollars a month in these pension funds. Money they’ve spent years contributing will be almost gone within a year and now Govt wants them to continue slicing 5% of their income and throwing it into an abyss? I thought this Minister understood Finances
I can make a 0.5-1.5% ROI on my money within 24 hours doing informed crypto trades or a little longer running algorithmic bots, meanwhile unna expect me to pay someone else admin fees to do it for me or drop it in credit union to get that same return in a year?
All fiat banks suck because they know their time is limited. No surprise they blocking me from using MY money to make such investments.
This is another form of good ole Caymanian theft.
Shut down these private pension plans as they are stealing our hard earn cash! A nationalisation pension plan is the best way forward.
And you think government is going to provide for you? Wow what a dreamer you are.
It is disheartening that we are forced to hand over our hard earned money to these very incompetent pension funds.
It would be so easy to designate real, world class funds with strong, long term track records.
should have postponed again, lots of people are struggling and money down the drain scam to begin with
“Saunders has ruled out nationalising the system under the successful public pension system that funds government workers’ lucrative retirement income”
Otherwise known as the unfunded liability.
politicians…how can ppl survive on ci$ 1000 a month in retirement with private sector pension? wonder who benefitting from that?