Options for the Future Regulation of Private Sector Pensions

Project Updates as at 31 May, 2017

Status: Closed

  • The project has achieved the target outcome desired by Cabinet and a Project Closure Report has been finalised.
  • The project has resulted in:
    • An increase in the normal age of pension entitlement in the Cayman Islands from 60 years old to 65 years old, in line with international practices.
    • The development and approval of the National Pensions (Amendment) Law, 2016 on December 31, 2016 (note: various sections have future commencement dates).
    • Enactment of the Normal Age of Pension Entitlement Order January 1, 2017.
    • Execution of a public education campaign on the changes to the National Pensions Law.
    • Development and approval of the National Pensions (General) (Amendment) Regulations, 2017 by Cabinet and subsequently the Legislative Assembly in February 2017.
  • In addition, the team exceeded the original project scope and has delivered:
    • Execution of an actuarial review of the Retirement Savings Arrangement (RSA) Schedule in 2016, which resulted in a new schedule as of January 9, 2017.
    • Development of the Pensions Certificate of Compliance Programme in conjunction with the Department of Commerce and Investment, which was implemented in December 2015.
    • Progress towards the development and passage of legislative changes to the National Pensions (Pension Fund Investment) Regulations (1998 revision).

Project Updates as at 30 November, 2016

Status: Project Execution

The May Progress Update reported the successful passage of the National Pensions (Amendment) Law 2016 which, as well as increasing the retirement age, addressed a range of long-standing issues in the framework for pension administration in the Cayman Islands.  The National Commencement Order for the Amendment Law is expected to be issued in December, 2016. In this reporting period, the Ministry has been preparing for the full implementation of the changes, and a series of communications to raise awareness is expected to begin on 9 December 2016.

In addition to the passage of the Amendment Law (2016), work has also been concurrent in regards to revising two key regulatory instruments for the Law – the National Pension (General) Regulations and the National Pensions (Pension Fund Investment) Regulations (1998 revision).

Amendments to the National Pension (General) Regulations are required to create  the infrastructure to support the changes that have been made through the Amendment Law (2016). Drafting instructions for the General Regulations are expected to be finalised by December 2016. An update of the consultation draft of the Investment Regulations is expected in December 2016, following meetings with key stakeholders in September 2016. An actuarial review of the current Retirement Savings Schedule has also been completed, the first since the implementation of the law in 1998. The new schedule has been approved and will commence on January 2017.

A Strategic Assessment looking at options to improve the efficiency and effectiveness of planning and building inspection (PSI03) has been approved by Cabinet and the key recommendations agreed for immediate implementation, utilising the additional resources allocated to the service in the 2016-17 budget. These improvements include the roll-out of an Online Planning System to include full electronic document management; improving processes and workflows; and better co-ordination between the planning department and other entities involved in development control. The result will be more efficient planning regulation and improvement in the quality, reliability and speed of the service for clients. The Online Planning System is expected to be completed for March 2017. One of the first deliverables is the Builders Board registration tool, which is on target to be released on December 11, 2016. Once these changes have been implemented and their impact assessed, further consideration may be given to the potential for more transformational change in the way the service is delivered.


Project Updates as at 25 May, 2016

Relevant EY Recommendations:
46 – Abolish National Pensions Board and move responsibilities into CIMA

PROJECTS ASSIGNED TO: MINISTRY OF EDUCATION, EMPLOYMENT AND GENDER AFFAIRS (EEG&A)

Minister: Hon. Tara Rivers

Project Sponsor: Mr. Christen Suckoo, Chief Officer

Overview (taken from Cabinet’s Project Future Programme Brief): This project focuses on taking forward the Government’s commitment to a major review of the legal and regulatory framework for private section pensions,   to address to a large extent some of the long standing concerns such as a culture of non-compliance and a limited attention to the regulation of pension plans and plan providers.

Status: In Project Planning.    

Ministry/Portfolio Update:

  • Phase 1 (completion of legislation) was completed 4 May 2016 with the approval of the National Pensions (Amendment) Bill 2016.
  • This Bill contains some 50 amendments, including increasing the age at which persons become entitled to access their pension (formerly known as the ‘normal retirement age’), how often members receive statements about the performance of their pensions, when non-Caymanian employees become pensionable, when pensioners can transfer their pensions to an overseas pensions plan, and when pension administrators should notify employees that their employer is in arrears.
  • The completion of the detailed plan for implementation is on track for July 31st, 2016 (Phase 2 – implementation). This will include such things as a communications plan and a plan for addressing any operational changes at the Department of Labour and Pensions, to prepare for implementation. It will also include the completion and implementation of key supporting Pensions Regulations.