The Cayman Islands Minister for Employment, Rolston Anglin, announced last Friday (15) that there will be no pension reform before the May General Elections.

Anglin confirmed in the Legislative Assembly that work on the Cayman Islands National Pensions Law was almost complete but will not be available for consideration until after the 22^nd May election.

The new Pensions Law bill would eliminate the National Pensions Office and the board that oversees that office. In its place, it has created a new government Department of Labour and Pensions. The Cayman Islands Monetary Authority would act as the regulator for the private sector pension plans.

The Minister said the majority of the administrative moves were already in place but the problem still remains whether companies would still have to make 5 per cent of salary contributions on behalf of expatriate employees’ retirement plans.

At present, private sector retirement plans must take a 5 per cent of salary contribution from the worker plus an additional 5 per cent contribution from that workers’ employer. However, under the proposed new law pension contributions for non-Caymanian workers would become voluntary. For Caymanian workers there would be no change.

The big question is what would happen to the non-Caymanian contributions they have already made?

Anglin said early withdrawal of their money is not an option he would support!

Both Silver Thatch and The Chamber said the potential removal of work permit employee contributions from those funds would lead to higher costs for plan administrators and lower returns for workers investing for retirement.

In a statement, issued last August, on behalf of Silver Thatch Pensions by their Board’s Deputy Chairman, Charles Farrington, he said, ““Immediately most, if not all plans, would regress from growing through contributions, to shrinking, as monthly contributions suffer a substantial reductions due to the shut off of expatriate contributions.”

He further said that employees on work permits who have left the Cayman Islands would likely continue to make withdrawals from the funds as normal, while at the same time fewer contributions would come in each month.

“All of this would translate into much higher per unit costs for the plans – that is – lower returns for the members,” Farrington said. “At some point the plans would presumably return to growth again but it could be many years.”

A statement issued at the same time from the Chamber Plan said, “Unless the government is saying work permit holders will never have the right to retire here, why would they allow or encourage those employees to liquidate their pension savings? If it made sense to encourage saving for retirement yesterday, it should still make sense tomorrow.”