Bank charges cutting into pension transfers
I recently applied for my retirement pension and wanted the amount paid monthly into my bank account. However, I was mystified to learn that my pension provider does not do domestic bank transfers for pensions. If you want your pension paid into your bank account, they only offer international wire transfers.
So, the money goes from their bank in Cayman to my bank in Cayman via the US. And for the privilege, they charge me $60 a month for the unnecessary international wire and my bank charges another $6 a month to receive it. Over the course of a year, I’ll lose $792 in bank charges to receive my pension.
I asked the employee about how the pension company paid their wages, and of course they just transfer it from the company bank to the employee bank with a domestic transfer, no fees involved. So why refuse to do this for my pension? It seems like a way for the pension company to make extra money off me – as if they’ve not already made enough with the exorbitant fees for ‘managing’ my pension fund.
Is anyone aware of any pension companies who can pay by domestic transfer? I might be better off transferring the pension elsewhere and then retiring.
Auntie’s answer: Your question does defy belief in that it seems the transfer method for your pension makes no sense, except, as you said, it enables someone to make more money on your transaction and you to receive less. Therefore, I asked the Department of Labour and Pensions (DLP) to weigh in on your issue.
First of all I was told by an official, “Under the National Pensions Law, any fees charged by the pension plan administrator must be reasonable. Accordingly, the payment of pension disbursements at retirement or otherwise will only incur reasonable fees, which members can discuss with the pension plan administrator.”
But the issue in your case seems to be bank-related, the official explained. “In this instance, however, the fees appear to be those of the bank, not the pension plan or its administrator. We are aware that some financial institutions, utilised by the pension plans, charge fees of a similar amount for wire transfers; however, that was prior to the Automatic Clearing House.”
The Automatic Clearing House (ACH), which was launched this year, facilitates electronic transfers between local Class A banks. The official explained that the result of this new network, as indicated by the public literature, was understood to be lower expected fees so “therefore the fees charged by the bank to the pension plan administrator and subsequently to the specific member should be reduced accordingly”. Well, that clearly is not happening in your case.
The DLP official therefore suggests that you raise this issue with your pension plan administrator considering that the ACH is in place. I hope you are able to get satisfaction.
You can read FAQs about the Automatic Clearing House here
Category: Ask Auntie, Pension Questions
This overcharging issue , sounds to be coming from a overseas recipient that has his/her retirement benefits direct deposited in a Cayman Islands Bank and getting ripped off . I would go to the Bank Manager and tell him/ her that the Bank overcharging and taking too much of my retirement benefits and please adjust the direct deposit fee or else . If that fails , then find another way to skin that cat and keep more of your money , and move your bank account to different bank .
Can you have your money direct deposited into account in the Country which you’re getting the benefit from , and have a credit card to use from that account anywhere in the world .
Read the question again. It’s a resident getting their Cayman pension from a Cayman bank account to another Cayman bank account. You either get the payment into your account via a draft, via an online transfer or the way they have been doing it – via wire transfer that incurs a large wire fee from the transmitting bank (the pension company’s account holder) to the receiving account (the pensioner). It’s not the banks fault it is the pension provider. The pensioner should go as high up in the pension company they can to get this changed & tell them if this doesn’t change to online transfer they will be named & shamed.
Banks. The biggest thieves in the whole wide world. And we PAY them to take our money! LOL
This is so ridiculous. I hope it’s sorted by the time I retire. No wonder people would rather put their money under the mattress.
Banks suck at the best of times…
what a ripoff!!!
Regulators that fail or refuse to regulate. Typical.
Yep, you’d think it was run by the CIG!