Pensions Investigation Unit - Department of Labour and Pensions
Pensions Investigation Unit
The Pensions Investigations Unit, was established as part of the Department of Labour & Pensions by section 79 of the National Pensions (Amendment) Act, 2016 which formally repealed the National Pensions Office and the Office of the Superintendent of Pensions. The Deputy Director of Pensions oversees the Pensions Investigations Unit which consists of 3 Senior Pensions Officers, 2 Senior Labour & Pensions Inspectors, 1 Administrative Officer and 1 Assistant Officer.
The Unit’s remit is the regulatory supervision and enforcement of private sector pension plans and employers in line with the statutory requirements of the National Pensions Act and its supporting Regulations. As part of its mandate, the unit receives from employees and other stakeholders reports of non-compliance and investigates these allegations made against private sector pension plans and/or employers. The Unit also processes pension benefit applications and provides guidance to pension plan administrators as well as the general public on the National Pensions Act.
If you require assistance with a pension enquiry or seek to file a pension complaint, please download, complete and email the Preliminary Worksheet and dlp@gov.ky.
Employee Rights and Responsibilities
Under the National Pensions Act (“the Act”), as an employee, you have serious responsibilities including the following:
- Ensure your employer is providing you with a pension plan and you receive a pension statement, at least, twice per year from the plan administrator
- Take an active interest in the pension plan that is being utilized by your employer and to which you are enrolled
- Ensure applicable payroll deductions are being taken from your earnings and save all payroll slips as evidence of the amounts
- Ensure contributions are paid to the pension plan administrator by reviewing your pension statements in comparison to your payroll slips
- Notify your pension plan administrator of changes in personal information such as beneficiaries, telephone contact, phone numbers etc
- Attend your pension plan’s annual general meeting and any other information sessions
- Be aware of your employer’s responsibilities, your responsibilities and discuss with co-workers
Employer Rights and Responsibilities
Under the National Pensions Act (“the Act”), an employer has critical responsibilities including the following:
- Be aware of the provisions of the Act and that they are a condition of employment
- Be aware of the employment circumstance of people in your employ- be wary of employees not wanting to pay and of employees where others actually hold their work permits
- Provide a pension plan or make contributions to a pension plan for every eligible person employed by the employer
- Has the legal authority to take the pension deductions from the employees’ earnings up to 5%
- Ensure that the employee and employer contributions are paid into the pension plan by the 15th of the following month. (ie: September contributions are due on the 15th October)
- Establish and retain employment records for five years including employment dates of pensionable employees, payroll slips, all deductions from employees ‘earnings, all contributions paid by the employer and the date of the payment
- Advise the pension plan administrator of changes in employment status of employees and provide the administrator with information as requested
- Provide information requested by the Department of Labour & Pensions and comply with our orders and directives
Key Topics
Eligibility
All Caymanian and Permanent Resident employees are immediately eligible to participate in a pension plan with their employers. All non- Caymanian employees become eligible/pensionable after the completion of nine (9) months of employment within the Islands, not with a specific business, and regardless of probationary periods.
These requirements apply to all such employees between the ages of 18 to 65, whether they are in full time or part time employment. There are, however, some exceptions:
-
Caymanians, under the age of 23 AND in full time education, are not required to participate in a pension plan. As a result, neither the individual nor their employer is required to have a pension plan or pay any pension contributions. Please note that all three requirements must be true at the same time, for this to apply.
- Non-Caymanians and non-permanent residents that are employed as household domestics are also not required to have a pension plan or pay pension contributions.
Contributions
The contribution rate in the Cayman Islands is presently set at 10%. The 10% rate is, generally, comprised of 5% from the employee and 5% from the employer. As a result, an employer has the legal right to deduct up to 5% of an employee’s earnings in order to pay that amount into the employee’s pension plan.
Employers have a legal requirement to pay 10% of each eligible employee’s earnings into their pension plan. The requirement to pay pension contributions is up to the year’s maximum pensionable earnings ($87,000) for each employee. If the employee or employer decide to pay contributions on amounts over $87,000, then those amounts will be considered additional voluntary contributions.
Pension contributions are due on the 15th of the month following their deduction. For example, January contributions are due on the 15th February. Contributions paid after the 15th of the month are considered late and subject to interest.
Additional Voluntary Contributions
If an employee or employer pay contributions greater than 5% or over the year’s maximum pensionable earnings ($87,000), then those amounts will be considered additional voluntary contributions.
Section 47 of the National Pensions Act permits employees to withdraw their additional voluntary contributions for the following reasons:
- Housing
- Medical expenses where the member's health insurance does not cover the cost of the medical attention sought and the medical attention sought is not elective;
- Temporary unemployment
- Educational needs of a member of the dependent child of a member who is under twenty-three years of age and pursuing fulltime education
The Guidance Note on the subject can be viewed here:
Overseas Transfers
The option to obtain a lump sum refund is no longer available under the National Pensions Act, unless the member’s account value is less than CI$5,000. Instead, persons that no longer reside in the Cayman Islands can apply to have their pension benefit transferred, once they have met the following requirements:
- Employment Terminated
- No contributions for 2 years
- Cease to be resident for 2 years
The Guidance Note on the subject can be viewed here:
Registered Pension Plans
Under section 4 of the National Pensions Act (“the Act”), an employer is required to provide a pension plan or make contributions to a pension plan for all eligible persons employed by the employer.
An employer can have their own pension plan that must be registered with the Department of Labour & Pensions and that pension plan must comply with the Act including filing the annual renewal of registration, audited financial statements and associated documentation.
Alternatively, an employer can make contributions to an existing registered pension plan. The link below shows the list of multi-employer pension plans that are registered in the Cayman Islands and can accept employers, regardless of sector or industry.
Guidance Notes
The Pensions Unit issues guidance notes to pension plan administrators in order to provide clarity and further explain specific sections under the National Pensions Act. Below is a link to the current Guidance Notes.
Statistics
Under the National Pensions Act, Caymanians can withdraw their pension contributions in order to purchase property, construct or purchase a home as well as to pay off a mortgage. The following statistics are in relation to this provision of the Act.
Interest Rate Calculator
To be released
Pensions Act Training
The Pensions Investigation Unit is also a key contributor to the training of private sector employers on all areas of the Pensions Act in an effort to continually improve employers' understanding of the Act as well as their compliance. If you are interested in registering for training on the National Pensions Act (as amended) please complete the training registration form by clicking the link below and submit the complete Registration Form via email to dlp@gov.ky.
