Pensioners given access to more of their cash
(CNS): Pensioners in the private sector are being given access to more of their funds at retirement each year. The Department of Labour and Pensions (DLP) has announced that the annual disbursement of funds under a Retirement Savings Arrangement (RSA) has increased by 9.5%, from $12,900 per year to $14,125.
The National Pensions Act permits members to access their pension benefits at retirement, either through an annuity or an RSA, and the amount a pensioner can withdraw annually is calculated according to their age and account value.
DLP Director Bennard Ebanks said that after consultation with the board, he was able to approve another increase in the pensions of seniors, who may need it to maintain their households. “As prices rise, we hope this increase helps to offset the Islands’ increased cost of living,” he added
According to the Economics and Statistics Office (ESO), inflation has risen by 6.6% since April 2022, when the RSA disbursement figure increased by 3.3%.
Labour Minister Dwayne Seymour said there was a misconception in the community that retired people can only withdraw $1,000 a month, but this isn’t true.
“The amount a person can withdraw is based on a calculation of their age and the amount in their account,” he stated. “I support this increase as it’s important that we take care of our seniors and those most vulnerable in our community. With access to a larger payment, we hope it makes them become more confident in supporting themselves. This is just one of government’s initiatives demonstrating its commitment to holistically evaluating pension matters.”
In the guidance notes issued by DLP, the age is defined as the age of the member at the start of the calendar year in which the payments are being made. A retired person can withdraw any amount up to the annual maximum based on their age and account value.
Pensioners also have the option of terminating the RSA and transferring their balance to an approved annuity, or if they are 89 years or older, they have the option of taking the full RSA account balance with a written notice of at least 60 days.
All applications received from 1 January 2023 and all approved RSAs are entitled to the new maximum figure, $14,125, at their next disbursement.
Since the new figure comes into effect on the 1 July, members who received their annual disbursement from 1 January to 30 June should be provided a subsequent payment for the difference between the new and previous RSA figure of $12,900 per annum.
Pensioners seeking more information about the new RSA increase should contact their pension plan administrators directly.
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Category: Business, Local News, Pensions
Anyone over 40 should have a well defined retirement plan and be walking that path, independent of governments and peers. Better yet if there is a plan B and C, given the curveballs that can be thrown by life. Part of that journey is realization and acceptance that retiring in Cayman may not be desirable, or feasible.
The One world Govt. will be here by 2030 and everyone will happily fork over ALL their assets: HOUSE, APT. CONDO. MANSION, SHACK, and live off of Universal Basic Income.
You all need to get ready and quit griping because it’s coming by 2030 whether you like it or not.
Research: World Economic Forum.
Double Standards since civil servants can’t also do this!
Bad politics in halfway dealings.
My money I worked for and Government dictates how much I get….wow a whopping.$14000 yearly barely buys food
And how much did you contribute?
If you bought an Annuity does the annual withdrawal also go up?
CIG have capped private pension annuities to just over $14k a year, well below poverty level. It doesn’t matter the level of funding, or the rate of return you achieved. Retirees can only receive just over $1000 a month of their own savings. This is on private property. Time to pack up our lives in Cayman and retire somewhere that understands grownupland. This isn’t going to be the place for us.
No. The Cayman market does not offer inflation linked annuities. The monthly amount is fixed for the term of the product (it could be for 20 years or another could be for life for example).
CNS: There is a published table showing how much can be withdrawn as it depends on age and pension account balance. It would be useful to publish that table. Ther is a misconception, which is only added to by your headline (the Compass did the same) that makes it appear that everybody gets the same, which is not the case.
CNS: I’d be happy to publish it if I could find it – or if someone sent it to me (info@caymannewsservice.com). It doesn’t appear to be on the L&P webpage, or if it is it’s well hidden Hopefully, it will be easier to find on the new website.
CNS – I think one of the pension providers has it on their website but you are right it is hard to find! I don’t know why
http://silverthatch.org.ky/wp-content/uploads/2016/06/CP_STP_LawGuide_WEB_2016.pdf
Outdated now, but included here
CNS: Many thanks!
“Labour Minister Dwayne Seymour said there was a misconception in the community that retired people can only withdraw $1,000 a month, but this isn’t true.”
Can you add Minister Seymour?? Until now, the yearly maximum was $12,900. Oh, my bad, that $1075. Big deal.
I withdrew every dime I was allowed and put it straight into the Credit Union. I realise that isn’t available to everyone. At least now, my fund is making money instead of losing it. Thanks for nothing CIG.
Outrageous!
The Cayman pension system is a con job of overpriced annual management fee while underperforming the markets. It’s a sham. Government and pensions touts it as doing a noble service for the pensioner but rather it’s them sucking the equity annually from the pensioners without any high water mark performance benchmark. Shameful.
There should be a full withdrawal permitted for all expats to get access to their pension money now! Caymanians should be permitted to relocate their funds to Blackrock and Vanguard index funds that charge a 0.05% fee compared to Cayman pensions charging a 3.5% fee. #drainthepensions #freemymoney
Totally agree, it’s almost as if the pension legislation was written by the insurance industry for their own benefit, oh wait, it was…
If you have a government mandated requirement to hand over your money to a private company then there should be government legislation on how much that company can charge.
A full investigation and public disclosure should be made on how much the actual owners of the pensions make per year. I’d project a couple million while the pensioners look at their portfolio being as flat as a pancake on growth over years decades. It’s like the sound of a straw sucking the last ounce of juice out of the bottle as pensions excessive overcharging their incarcerated prey. Sickening! Release the funds!
The one dislike is likely the fat cat owner of the pensions. If Justice happens no more gravy train for you.
thats 1166. say i have no mortgage. cuc bill is 525 plus water for $150. health insurance $525. not to mention grocery ,doctors bill etc. How should i survive on this
While the opportunity to again withdraw private pension funds seem positive on the surface, has anyone considered what is going to happen to these people later in life when their pension funds are severely depleted or empty?
With the statistics showing that people are living longer and given the health indicators of diabetes ,hypertension and cardiac problems in Caymanian society ,how are these people going to provide for or even contribute to their medical costs in such cases? And ,of equal importance ,what safeguards are in place to ensure that pension withdrawals are put to constructive use?
In my humble opinion, this is at best a harebrained schemed which will further sink the Caymanian government by placing an unsustainable debt burden on future political directorates. The Cayman Islands are already in a ‘debt spiral’ due to grossly underfunded public pension funds and an ever increasing national medical debt for local and overseas medical expenses.
As a former Minister responsible for pensions, I can state that it was not my understanding that pension funds were set up to be drawn down at the first sign of crisis and it is folly to let pensioners believe that this is the purpose of their investment. In many other jurisdictions this is the purpose of ‘Social Security or some other similar fund. I understand that Cayman cannot have a social security system since we have no direct taxation regime or any instrument designed for such a collection of funds.
We could however have , established some kind of cushioning mechanism for these contingencies had we ,established some kind of Sovereign Wealth Fund / Public Investment Fund years ago when I and my colleague in the Legiislative Assembly,now Parliament made such a suggestion . Instead of investigating that possibility we were made fun of as “defunct school teachers “and informed that the General Reserves were for such a purpose.
As a conscientious and responsible Caymanian ,it gives me no pleasure in seeing the situation come to this but I have to remark that the proposal for further raids on private pension funds are a bankrupt proposal, fraught with danger and in the long run will only contribute to the Cayman Islands becoming more of a welfare state.
It is becoming increasingly clear to me that the challenges facing the twenty-first century Cayman Islands are challenges for which we are not equipped .These islands cannot continue to be run as an ‘ad hocracy ‘with challenges being addressed as and when they appear.
Try living on 1k a month and lets see if you come back with the same words. Easy for you to say when MP’s get generous pension benefits for serving a short time. I worked all my life, paid into my pension and a little personal savings, paid all my bills on time and had few luxuries. Now I can’t afford to cool my house. If only politicians would take care of the people they serve, like themselves.
Well articulated and on point!!! You need to say it again so the people in the back can hear!!!
VERY WELL SAID 6:41pm!! My parents worked so hard all their lives to have to struggle now for basic essential needs – this way of life is a joke! We as their children, do our very best to support them but with the way this economy is looking, we simply cannot keep up with inflation.
YOU HAVE TO DO BETTER CIG – free our pensions altogether with the stipulation that they are invested in an establishment that works, or find a way to regulate pensioners’ earnings of of our money, and make the funds actually work for the benefit of our people!
The comments appear to be aimed at early pension withdrawal and well worth considering in that context. However this CNS article refers to access to pensions after retirement age is reached
For all your long waffling, better invest elsewhere..duh!!
Well said, Roy. You will remember the abuse Jim and Haig put on us when we suggested a rainy day fund…now called sovereign wealth fund. They just wanted to spend the money flowing in from the early development like drunken sailors to please their voters.
Private pension assets are not public old age security/seafarer allowances to doll out benevolently by replacement Ministers without industry knowledge. These assets are privately owned assets, not government administered property, and restricting lawful access risks yet another needless loosing CIG lawsuit settlement. The methodology for calculating retirement income should in all cases follow international retirement income best practise, only capped by the retiree’s account balance, rate of return, inflation assumptions, and normal time to distance formula. Grownups should understand that the funded pension plan at 65 shouldn’t be the only retirement savings. You should own your dwelling, vehicles by then too.
Just give me my money in full, it is mine, do not why government or administrators have any say in my money now.
Could have trebled it by now!
How, 3:46? Explain clearly with facts, not “I’m given to believe “ stupidness.
Why should anybody explain to you? ‘I’m given to believe’ you sound a bit stupid if you wouldn’t know how to better invest own pension money. Duh!
14 thousand! Whoppers, let’s have a party .. not.
Why not a certain % of the total sum available, with the age of the person taken into account?
boy tha plenty money! knottt! lol
The assets in private pension plans belong to the retiree, not the government or administrators. Why is a government board metering out private household finances that have nothing to do with them? Reason enough for retired Caymanians to work out their plan Bs.
Good, cause weed not cheap these days.
I wish it was $12,900 per month but it is per year!
CNS: Sorry. It’s been corrected.
cayman pension system is a scam
Just means most people’s pension pots run out earlier in their retirement. I understand they need the money to meet expenses, but what happens when it’s all gone?
Exactly! I think this is short sighted. It may help a bit now but will just result in more pensioners becoming reliant on government handouts in the future.
Why? We stupid? So much is ours, could have bought another house by now instead of losing $40,000+ per year for 2years!
Cross dat bridge when we get dere.
Same thing that happens now. #welfarestate
It should go without saying that the private pension plans shouldn’t be any grown up’s retirement nest egg or security blanket. The Government restricts the payout to NAU levels, regardless of the account size. $1075/mo is the fixed income return on a $150k principal portfolio. If the government wants to do that, then they should release all the pension money in private accounts above the $150k principal sum for self direction, because there’s no utility in contributing funding beyond that level. This is a sham where only administrators benefit.
Where are you getting an 8% return for that to be the income on 150,000?? Seriously I would love that return. The bank is paying 1% on my fixed deposit
could have invested elsewhere..duh!
Yes, but where is my question. You will not get than annual return from most investments, net of fees.