Cayman’s new complaints commissioner is investigating how the country’s regulatory body for private sector pensions is policing companies that don’t pay what they owe their workers.

“Currently (the National Pensions Office) is not functioning properly,” Complaints Commissioner Nicola Williams said during an interview with the Caymanian Compass, noting that 670 registered companies in the Cayman Islands were either late on pension payments or are simply not making those at all.

Ms Williams said her office became aware during a month of pre-investigative research that some local businesses were taking pension contributions from employees and spending them on other things, including day-to-day operations. She said others were clearly “waiting until the 11^th hour” – essentially withholding payment until someone forced them to cough up the money.

The full amount of pension payments owed by those 670 companies is hard to glean simply because the pensions office depends on the companies themselves to report how much they owe.

The complaints commissioner questioned how businesses that are already not following the law could be trusted to report the amount of their delinquent contributions accurately.

“(Pension non-payment) seems to cut across all socio-economic barriers, but it particularly affects the poorer sections of our society and people nearing the end of their working life,” Ms Williams said.  

The commissioner said her office’s review would hopefully be completed in May, and that it would only consider pension non-compliance in the private sector.

The Caymanian Compass recently reported that more than $1 million in delinquent pension payments was owed by government entities, but the commissioner noted that was likely a small amount compared to what private companies currently owe.

The OCC intends to release the full amount of delinquent pensions owed in its final report, if that amount can ever be determined. The commissioner said she would also consider making public the names of the worst pension law violators.

Ms Williams said the investigation would focus mainly on the ability of the National Pensions Office to effectively investigate, charge, and convict companies that are non-compliant in making pension contributions required under the law. She said the OCC would further review the role the solicitor general’s office plays in the prosecution of alleged offenders.

“Some people might say ‘well, the complaints commissioner’s office only deals with government maladministration, what are they doing looking into private companies?’ What we’re looking into is the pensions office and the board that goes with that,” Ms Williams said.

In fairness to the pensions office, the commissioner noted it has been chronically understaffed and may not have received appropriate support from the government in that regard. She said her office’s review would look into that aspect as well

Also, she said the OCC would look at the current National Pensions Law, which provides a mechanism for fining delinquent companies following appropriate court proceedings – but in many cases, Ms Williams said that fine amounts to a slap on the wrist.

“Often it’s cheaper for companies to go to court and pay a fine than it is for them to pay the full amount of the pension,” she said. “In any case, the (National Pensions) Law hasn’t been updated since 2000.”

Ms Williams said she was concerned that the pensions office did not have the power to police non-compliance, thereby allowing companies continue to ignore Cayman’s pension laws and get away with it.  

NPO changes

Whether the National Pensions Office would survive until the end of the complaints commissioner’s review was thrown into question this week.

Education Minister Rolston Anglin, who has responsibility for national pensions, told the Compass Wednesday that government was reviewing a potential shift to Cayman’s strategy in regulating and enforcing the pensions law.

One option being considered was moving the regulatory responsibilities now handled by the pensions office and shifting those to the Cayman Islands Monetary Authority. The monetary authority already regulates the Islands’ banks and insurance firms.

The enforcement of non-compliance with pension payments could then be shifted to another government agency in attempts to set up a “clearing house” for all employment related matters in one agency.

“I can’t prejudge the investigation, but if it goes the way I’m envisioning you would not have an NPO, you would not have (an NPO) board,” Mr. Anglin said. “CIMA’s the board…you just have another area of CIMA.”

“My vision is that (complaints and enforcement) will be handled within the department of labour, so you have a one-stop shop.”

However, the minister noted that discussions are at a preliminary stage and no final decisions on the matter have been taken. A meeting to discuss the issue had been was set with the National Pensions Office for next week.