Bill to allow more pension raids goes public
(CNS): The National Pensions (Amendment) Bill, 2023 has been published and is now open for public consultation. The legislation provides for more people to take out more cash from their pensions in relation to buying a home. It increases the maximum amount of withdrawals from plans for deposits on buying or building a house, or reducing or paying off mortgage payments and real estate loans.
The amendments increase the maximum withdrawal to buy or build a home from CI$35,000 to $50,000, allow up to C$50,000 for a payment against an existing mortgage or residential land loan, and increase the withdrawal amount to pay off a mortgage in full to CI$100,000. The draft law also requires applicants to repay an additional 3% contribution, up from 1%, into their pension plan, among other amendments.
The bill springs from a private member’s motion that was presented by independent opposition member Chris Saunders (BTW) at the last meeting in June, when it was passed unanimously. Saunders submitted a parliamentary question, to be asked this week, asking what was happening about the motion. He said that he had written to the premier about the issue but had not received a reply, but he was aware that ministers Jay Ebanks and Kenneth Bryan were pressing the labour minister about the legislation.
After the press release was issued Monday, Saudners sent out a social media message saying he was pleased about the publication of the bill but that, unfortunately, it wouldn’t be ready to be passed through parliament at this meeting as the consultation period takes 28 days.
Once passed, the new law will help ordinary people deal with the rise in house prices and improve the chances of local people owning their own homes as well as help those with increasingly unaffordable mortgages.
Labour Minister Dwayne Seymour said the government’s mission was “crystal clear”, and that the goal was to empower every Caymanian to own a piece of the land they call home.
“We recognise today’s struggles, but with this amendment, we’re paving a pathway for our people to pay off or reduce their mortgages or purchase or build homes,” he said. “I have always been, and will always be, about helping our people. This government is unwavering in its commitment to ensure that every Caymanian has a brighter, more secure future.”
The wording in the bill has been reformed to allow pension withdrawals to be used to buy or build a duplex, as until now the law did not expressly permit this. The new bill still requires restrictions on applicants’ property and extends the duration of those restrictions into post-retirement in the event the property is sold. It also introduces new requirements for applicants to prove the repayment or ongoing repayment of any past property withdrawals.
People will also be able to withdraw the additional voluntary contributions they have made to make a reduction payment on their existing mortgage or residential land loan. Under the National Pensions Act, members are not required to repay other voluntary contributions, whereas mandatory contributions withdrawn for property purposes must be repaid to the pension plan.
Two new sections are also being proposed. If the pension funds withdrawn are not used for the intended property, they must be returned within six months except where a unit is being constructed. If the total withdrawal was not used, it must be returned within twelve months.
Officials said the bill aligns with the government’s commitment to providing solutions to enhance the well-being of the Cayman community. These proposed amendments will provide more flexibility to pension plan members, allowing them to make withdrawals for essential purposes while also requiring repayment to avoid jeopardising their long-term financial security.
The public can give feedback by emailing the ministry at mebc@gov.ky before midnight on 16 October when the consultation period ends.
See the bill here.
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Category: Local News, Politics
Fab Plan, let’s not address the actual issues causing this inflationary climate. Let’s just F young people. And F their futures. It really doesn’t matter as we we will screw our children for a some shiny beads today if it benefits our old pol as##es. Okey dokey. This is idiocy.
I’d much rather have my money now than watch it dwindling down to pay admin fees.
877 Cash Now!
I note the unanimous approval of this proposal.
What is disappointing is that not 1 of our 19 elected officials thought that we should also establish a fund to offset the long-term impact of this proposal. I get that they feel that they will be out of office by the time this really bites but what about their younger siblings, what about their children, what about their nieces and nephews.
If you are telling your supporters now that they can use their gas, at least get a jerry can and fill it up cuz you know you going to run out sooner.
You are a NAVIGATOR, the ability to see over the horizon.
This art has been lost by most Caymanians.
The continued plundering of pension accounts continues by the political remnants of UDP and PPM for short term political gain.
The politicians destroying pensions are setting the stage for our grandchildren to be burdened with high income related Social Security Taxes to fund income replacement for future retired persons.
We should wish all of our politicians be put in jail with a Joseph telling them to save in the good years, to fund their 1survival in the bad years.
But then most of our politicians do not have the sense to understand and apply the principle of that historical story.
Their mantra is to live for today, to Hell with tomorrow and the negative effects on those people.
Delayed gratification is not in their DNA… they fail to make plans, every decision is about getting reelected, their long term plannig ends at the next scheduled election day.
Private pension assets aren’t government property. It’s not their money to regulate, or limit to foreign asset classes and shaky markets. The entire financial system came to within a hair of implosion in 2008, and we are stuck with those same savings instruments over our lifetime investment horizon. Who pays the pension holder when that money vanishes?
CIMA can and does regulate the pensions to an extent indirectly by approving the FSPs that manage the assets…..
What they can’t but should do is regulate the asset managers performance and how much they get paid and how they get paid.
What government needs to do is amend the damn Investment Regulations from 1998. Investment restrictions have been in place for over 22 years now and 2008 was a global affect, not just Cayman private pension plans.
Drawing put pension funds now are a VERY STUPID idea The M P’s should have to support them when they are old and retired.
If my mortgage is at 8% and my pension is returning 4%. Then it is not stupid to draw down from my pension to pay off some of my mortgage.
S0o when you retire you will depend on hand out from tax payers/Govt.to support you. Where are your pride ?
Many public/civil servants are on defined benefits which should be stopped. They should be made to pay into pension funds that lose money just like everyone else! Why should the tax payer bear the cost of keeping them comfortable with their gold plated pensions!
The defined benefits scheme for civil servants was stopped for new entrants to the civil service in 1999, 3:56. The judges fought against it being dropped for them so maybe they kept theirs since they are a law unto themselves.
You are right, but it still means public money will be used to support gold plated pensions for hundreds of civil servants for life. Since there is no retirement age anymore these pensions should not kick in until aged around 75, alternatively to retire earlier they should only get the 12k a year like the rest of us.
Cayman’s pension plan options are so limited and archaic that they struggle to outpace inflation over time, while also stuck with USD currency exposure in a changing world order. Let Caymanians sign an indemnity to opt out of NAU lifelines, and conditionally withdraw their savings, to redeploy into a full spectrum of qualifying alternative investments. Real estate being one of those. Not everybody will be savvy enough to walk and chew gum at the same time, but there are some that don’t need CIG intervention on managing their household affairs. Set them free.
So you can sell them a crypto ponzi, no doubt.
This is what happens when you hire non-qualified people in positions of finance! Has no-one within that CIG department asked the BIG elephant-in-the-room question – that once everyone has taken their pension amounts out, when these people come to retire and have next to nothing to live on, who will support them? Unbelievable how sometimes this Government runs…
Why would you assume the pension is the only asset or savings mechanism for those withdrawing from underperforming fee-intensive opportunity-missing one-size-fits-all plans? Others might call reallocation, an example of time-sensitive prudent investing.
Very wise to place your pension into a property which you still won’t be able to afford. Look we need to stop these foolish vote buying tactics. Lets face the elephant in the room, when you buy this house, there are “other” costs attached to this property. Interest rate hikes, property insurance, life insurance, maintenance to name a few.
What would really help caymanians is to get fuel prices down, CUC reduced, water reduced, the price of milk, etc.
We are going to break the pension fund and “everyone” will lose.
I think the real elephant in the room is, who is going to be accountable once the funds have lost the money that’s being paid in
My pension fund lost half my money in 2008 – who pays me for their incompetence?
I think the politrixians think pension funds are just big piggy banks, and have no clue about the underlying investment structure.
Caymanian politicians have no idea about anything except how to buy ‘wotes’ with a toxic combination of xenophobia and envy.
They would be out of their depth in a puddle.
people already can’t live on what they get from their pensions. might as well get what you can to pay off your house.
And watch inflation go up when many access and spend their pension on wants instead of needs.
Preach, on to the deaf, blind and dumb.
Maybe Time Share prices and many new cars will be bought.
Whilst this seems like a good (vote buying) idea in principle.
We will all be paying to look after the people who use the money to purchase property or pay mortgages and then sell the property.
Even though this will help some people, the idea of a pension is to support you when you are no longer working.
If there is even $500 left per month, that will be the very lucky few. No one can survive on that in Cayman!
the whole pension system is here is one big scam.
if pension providers don’t achieve their benchmarks…they should not get paid.
Should be only one Pension fund in the Cayman Islands run like the CREDIT UNION, where people can put their pension money and earn interest without losing some of their money, but gaining.
assume you have only 1500 apple available in the cayman Islands and allowing 10,000 people to buy only apples at once… Holy God, all property owners will make money soon…
Expats should be able to do a KYD30k withdrawal to either put that money in real estate or their own investment accounts instead of held captive in those grossly overcharging underperforming leach sucking con job pension funds. Disgraceful!
I would argue 9:39 that you’ve underperformed in saying just how disgraceful these pension funds really are.
You’re right I should have added fat cat white collar crime middle men weasels owners of the actual pensions that are the ones making 7 figures each year from their overcharging MER 3.5% fees likely dining multiple times at expensive venues like the Ritz and contemplating which new condo to buy this year with the MER leach fees.
Still underperforming?
This should only happen if public servants can do the same thing. We are struggling too.
Start paying in then you can draw out.
raiding a pension fund to purchase property they currently cannot afford???
welcome to wonderland.
It’s their money, now or later. Now is likely cheaper than later on that asset class. It is still savings, only with a roof. Makes sense.
Saunders, Bryan, Jon Jon, why not lower the cost of utilities, fuel, milk and remove the points system attached to PR. Everybody and their mother is buying up properties for this main reason which contributes to the high cost of living. Remove this and Caymanians can live!
bonkers stuff. the concept of pension savings is obviously lost on caymanian politicians.
brett hill was right.
Brett deserves a statue in Heroes Square next to Reid.
Lets just raid the pension funds completely and be done with it all. While your at it stop all pensions to politicians and civil servants.