Compliance pension law focus
(CNS): Ensuring that employers comply with the pensions law is one of the major focuses of new legislation dealing with private sector workers’ pensions. The first major re-drafting of the law since it was passed in the 1990s, the minister for employment revealed the proposed bill on Monday and asked for public participation. The law also provides for the split of oversight between CIMA, which will now regulate the pension funds, and the new Department of Labour and Pensions, which will ensure employer compliance. The law does away with the National Pensions Board and introduces a fixed penalty regime and direct consequences for employers who fail to follow the law.
Officials also said that the new law provides greater transparency for employees, or members of the pension funds, and requires funds to issue quarterly statements as well as host annual meetings for workers to question and probe those responsible for managing their retirement money. It also obligates funds to tell employees, and not just the labour department, when employers are delinquent with contributions and will also require employers to keep pension records for seven years on every employee.
The ministry has launched a comprehensive survey which provides for comments on the main areas of the bill. Over the next month oficials will engage in a wide consultation of the law before it is brought to parliament for debate. Speaking at a press briefing on Monday, Minister Rolston Anglin said he believed the bill "was going to go a long way to creating a culture of compliance and to make sure workers' money is protected.”
With hundreds of non-compliant cases, the minister said it was clear that the previous regime was not working and improvements were needed. “When we have a situation with 600 cases in a backlog of non-compliant employers, we knew we had to act and we needed to act in a way that was reasonable. Government must take a leading role in ensuring Caymanians are better prepared for their retirement after a lifetime of hard work,” Anglin said,
He added that the United Democratic Party had campaigned on a commitment to examine and revise work related matters and there was nothing that strikes more to the core of work than pensions. “After a long career, if our people can't retire with dignity then they will ask what the life-long hard work was for,” he added.
Anglin said the new law would enhance pension protection and the plans themselves, as well as introduce an improved regime of regulation and transparency. But above all, he said, it was about developing a culture of compliance among employers and employees.
Explaining the decision to split the regulation of the plans themselves from the compliance of the employers as well as the elimination of the National Pensions Board, Anglin said that CIMA was already resourced to oversee and regulate pensions as it could be absorbed into the department that currently regulates insurance.
The minister said it would have been a costly exercise to create an internal regulator for the funds themselves inside the labour department. With the department now focused on compliance and enforcement, it will be issuing the fixed penalties and ensuring that businesses that are not compliant do not receive a Trade and Business license, which would in turn prevent them from getting work permits.
Those employers who dispute their fixed penalties will need to challenge the fine in the court and employees who believe their bosses are not compliant can complain directly to the labour department.
The minister explained that this is all an administrative function and there is no longer a need for a politically appointed board to deal with the country’s workforce pension regime. He pointed out that there are no other circumstances where a board manages a government department but that the role of boards was confined to government companies or statutory authorities.
Anglin also revealed that the normal retirement age is moving to 65, which will mean employers will be required to continue paying into their worker’s pension funds until that age. But, the minister said, there would be a three year transition period to allow people who are nearing 60 to still allow them to end their careers at that point if they wish.
Go to government survey and details of the legislative changes here
See draft legislation and notes on the law here
Check back to CNS on more stories regarding private sector pensions this week.
|NATIONAL PENSIONS BILL PROOFREAD VERSION FOR SUBMISSION TO LA 28052011.PDF||456.36 KB|
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