A former chairman of the Cayman Islands National Pensions Board said Wednesday that there were clear signs the country’s private sector pension contribution system was in serious disarray as early as 2004.

Carlyle McLaughlin said the former board stated concerns about the situation in its annual reports issued in 2004/05 and again in 2005/06.

“This may be a new issue to the public,” Mr. McLaughlin said. “But government knew about it.”

Cayman Islands Complaints Commissioner Nicola Williams announced last week that her office would review what led to the apparent failure of the country’s chief regulatory body, the National Pensions Office, to police the delinquent contributions of some 670 employers.

Education Minister Rolston Anglin also indicated last week that the government would at least consider dissolving the National Pensions Office and its appointed board, shifting its responsibilities to other authorities and government departments in hopes of achieving better compliance.

However, Mr. McLaughlin said that during his six to seven year term on the pensions board, the pensions office warned government officials numerous times about non-compliance with the National Pensions Law on the part of employers and even plan providers.

“Everybody’s aghast at this 670 people (referring to Cayman Islands employers) delinquent…back when I was on the board there were 400-something people delinquent,” he said, adding that during his tenure the pensions office had, at one point, just one inspector and later added a second to look into claims of non-payment.

“How do we expect two inspectors to evaluate 600-plus companies?” Mr. McLaughlin said.

According to the National Pensions Board 2004/05 annual report, then-pensions Superintendent Cyril Theriault informed board members that there were individual companies “owning sums of up to $840,000 in overdue pension contributions”.

“The magnitude of this growing problem to government cannot be overlooked any longer,” the board’s report stated.

A year later, the pensions board’s 2005/06 annual report revealed more problems with unregulated private sector pension providers.

“The board is concerned that there are still unregistered, and thus unregulated, pension providers who have been allowed to operate, accepting pension monies and that the National Pensions Office is still unable to determine if such funds are being managed within the safeguards of the established law,” the report read.

“Some eight years after the enactment of the (National Pensions) Law, there can no longer be any reasonable excuse for allowing employers to ignore it.”

That report was made public following the 2005/06 budget year which drew to a close on 30 June, 2006. It was apparently the last such annual assessment done by the National Pensions Board that was publicly released.

According to board members who spoke on condition of anonymity, the 2006/07 and 2007/08 annual reports from the pensions board have been presented to the government ministry responsible for national pensions. Those reports were not available on the National Pensions Office website, and board members indicated they have never been tabled in the Legislative Assembly.

Section 85 of the National Pensions Law (2000 Revision) states: “The Superintendent and the board shall report annually to the minister on the business of the Superintendent and the board. The minister shall submit the annual report to the governor and shall then lay the report before the Legislative Assembly at the meeting of the Legislative Assembly immediately following the submission of the report.”