Expats' pension deductions

Old May 22nd 2017, 8:44 pm
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Default Expats' pension deductions

https://www.caymancompass.com/2017/0...-and-pensions/
As this report says, our government intends to put all Work Permit expats' pensions contributions beyond their reach as from the end of this year. The accumulated funds will (maybe...) available to them in their home countries when they turn 65.

Anybody thinking of coming to Cayman to work, had better be aware that 10% of their salary will be taken from them and locked away with only a faint chance of their ever receiving it. The anti-expat politicians are getting out of hand, I'm afraid.
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Old May 22nd 2017, 8:55 pm
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Default Re: Expats' pension deductions

Originally Posted by Gordon Barlow View Post
The accumulated funds will (maybe...) available to them in their home countries when they turn 65.
Why maybe Gordon? Where did you infer this?
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Old May 22nd 2017, 9:10 pm
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Default Re: Expats' pension deductions

Originally Posted by Gordon Barlow View Post
https://www.caymancompass.com/2017/0...-and-pensions/
As this report says, our government intends to put all Work Permit expats' pensions contributions beyond their reach as from the end of this year. The accumulated funds will (maybe...) available to them in their home countries when they turn 65.

Anybody thinking of coming to Cayman to work, had better be aware that 10% of their salary will be taken from them and locked away with only a faint chance of their ever receiving it. The anti-expat politicians are getting out of hand, I'm afraid.
I do hope you are being OTT?
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Old May 22nd 2017, 9:21 pm
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Default Re: Expats' pension deductions

Originally Posted by ABCR View Post
Why maybe Gordon? Where did you infer this?
Because they can always change the terms of the contract again! Back when compulsory pensions deductions were first mooted***, the ruling politicians' original intention was that pensions would only be paid to persons who were then (at age 65 or whatever) resident in Cayman. Expats who had left the Islands would forfeit their entitlements, and the pols would ensure that they would not be allowed to stay here until they reached that age. A general seven-year rollover policy was introduced subsequently, and is currently in force.
*** That was in 1987. As Manager of the Chamber of Commerce then, I was in the middle of the extremely nasty battle between the private sector and the government (pols and bureaucrats). We won the day, but we knew they'd be back sooner or later. Now they are back. The Compass's Editorial is an accurate summary of the situation.
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Old May 22nd 2017, 9:26 pm
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Default Re: Expats' pension deductions

Sounds like a nice little earner for the govt. Actually, when you think about it, plenty of countries do something like this, the uk makes employees and employers pay national insurance which is really general taxation - for workers visiting most benefit is lost if they dont hang around for a long time.
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Old May 22nd 2017, 9:31 pm
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Default Re: Expats' pension deductions

Even private pension funds until recently were kept out of recipients hands and in the sweaty palms of insurance co's. It was only when they got too greedy and refused to self regulate about 3 years ago that the conservatives shafted them in a surprise raid by allowing the investors access to the principal sums.
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Old Jun 8th 2017, 1:07 am
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Default Re: Expats' pension deductions

Gordon, say the company I am contracted to work for is a Fortune 500 American company. I pay into the required pension 5% and they pay the required 5%....is it not a corporate pension..meaning managed by said Fortune 500 American company...and by extension...when I leave I can still claim this pension via this American company? How does the Government of Cayman have power over my pension? Or am I naive and the pension is not actually managed by the said Company but is actually a Government of Cayman pension?
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Old Jun 8th 2017, 2:07 am
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Default Re: Expats' pension deductions

Originally Posted by OttawaMan View Post
Gordon, say the company I am contracted to work for is a Fortune 500 American company. I pay into the required pension 5% and they pay the required 5%....is it not a corporate pension..meaning managed by said Fortune 500 American company...and by extension...when I leave I can still claim this pension via this American company? How does the Government of Cayman have power over my pension? Or am I naive and the pension is not actually managed by the said Company but is actually a Government of Cayman pension?
I'm not an expert on this topic, but I think your corporate pension is not subject to the Cayman law, as long your pension plan is registered with the CI government. In other words, Billy Bloggs Inc (paid-up capital $100, runs a garage in Podunk, Idaho) wouldn't be recognised but Fortune 500 Inc would be. To the best of my knowledge, employees who are covered by international banks' and other wholly reputable foreign companies' pension plans are free and clear of our government's control. If this is a situation you yourself are faced with, ask your employer.
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Old Jun 8th 2017, 7:11 am
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Default Re: Expats' pension deductions

Originally Posted by Gordon Barlow View Post
https://www.caymancompass.com/2017/0...-and-pensions/
As this report says, our government intends to put all Work Permit expats' pensions contributions beyond their reach as from the end of this year. The accumulated funds will (maybe...) available to them in their home countries when they turn 65.

Anybody thinking of coming to Cayman to work, had better be aware that 10% of their salary will be taken from them and locked away with only a faint chance of their ever receiving it. The anti-expat politicians are getting out of hand, I'm afraid.
As I see it Cayman is simply reacting to an issue which has been on the table for the longest while and was, for example, dealt with in Bermuda just before the turn of the millennium for exactly the same reasons, namely, that Bermudians were dipping into their private pension pots so that there was nothing left for them at retirement other than their pretty inadequate Social Insurance (State) pension scheme - much like the UK so it seems, in terms of adequacy.

At the time, in Bermuda, the locking-in was a big deal, particularly for expats, who had previously expected to receive their pension pots as cash when they left employment or the island.

All that happens now is that, if you remain on island, you can transfer the pot to another recognised scheme or if you leave you can leave it in place until age 65. I suppose you could also transfer it to another recognised scheme off-island though this could be tricky.

In my case, the provisions of my plans allowed me to take it at 55 (dramatically reduced of course) but the annuity rates were half decent at the time so it was fairly attractive to do so and the pension is in USD which buys more here in the UK these days. The only pain is that I have to certify that I'm still alive every year to keep it coming and get the indexation.
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