I am a work permit holder and I am here in Cayman since eight years. Now, we know there is a new pension law, which is approved by LA and will come into effect shortly even though they did not set time yet. My question is, if I resign now and go back to my country will my pension provider send back my lump sum money in my account because the new law hasn’t come into effect?
Auntie’s answer: An official from the Department of Labour and Pensions addressed your question. As you mentioned, the new law has not come into effect, which the representative pointed out: “The National Pensions (Amendment) Law 2016 was passed in the Legislative Assembly on the 6th May and published in the gazette on the 8th June; however, the amendment is not in effect. As a result, the current provisions of the National Pensions Law (2012 version) remain applicable at this time.”
What this means in your case is that the requirements for accessing your pension remain the same. Anyone seeking those funds must have “(a) terminated employment; (b) no contributions to their pension account for two years; (and) (c) cease(d) to reside in the Cayman Islands, which is defined as being off-island for at least six months”.
The important timeframe for you to consider is the two-year hiatus from contributions to your pension account. Therefore, once you have satisfied all three requirements, you may then formally apply to start the process to access the funds in your account. For the sake of clarity, that means if you are no longer employed and have been off-island for at least six months, you have to wait those two years with no pension contribution before moving to get the funds.
It would be extremely unfair on people who have left the Island and bought property and made other decisions in the expectation of a lump sum payment within 2 years if the new rules prevented them from accessing their pension. The only fair approach would be to ensure it only applies to people leaving the Island after the new law was passed. Hopefully that is what happens.
Why doesn’t the government do a press release stating that this will come effect in 2 years time, giving everyone who entered the ‘pension agreement’ enough time to exit the program as originally intended. After which everybody will not be miss informed/duped, and can commit to a new pension plan knowing full well they will never see their money ever again, and that it will become the expat tax that the government wanted all along.
What if you transfer to another pension fund in your home country? Is the 2 year hiatus still relevant in that circumstance?
What about if someone has moved to another country in July 2016 and has commenced the process of ceasing to be a resident of the Cayman Islands and their last contribution was June 30 2016. Would they still be eligible to access their pension in 2 years I.e. July 2018 even if the changes to the Law comes into affect before June 2018 because they have started the process?
This is the question! Has there been an official press release from the Government at all??