National Pensions (Amendment) Law, 2020 Chamber of Commerce Webinar 8 May 2020
• National Pensions (Amendment) Law, 2020 – Agenda • Policy Rationale • Explanation of critical parts – Suspension of Pension Contributions (aka “Pension Holiday”) – Emergency Withdrawal of Pension Funds
• Questions & Answers
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• National Pensions (Amendment) Law, 2020 – Policy Rationale
• The Premier stressed these strategies were not taken lightly, as “we are very mindful that these policies will have long-term financial implications not only for pension administrators, but also the government and more importantly each member who may find themselves having to withdraw from their pension plan during these times.” – Measures would provide immediate and much needed relief to both businesses and workers alike. – Benefit to employers - More cash available for key expenses, like payroll and health insurance contributions which are most crucial during these times. – Benefit to employees - More funds available to cover daily living expenses for their families, thereby reducing the reliance on social assistance programmes’
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• National Pensions (Amendment) Law, 2020 – Passed by the Legislative Assembly on the 23rd April 2020 – Gazetted on the 28th April 2020 – Multiple parts within the Amendment • Phased effective dates
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• Part 1: Suspension of Pension Contributions (aka “Pension Holiday”) – Timeframe
• Retroactively, from 1st April to the 30th September 2020, unless extended by Cabinet.
– Automatic
• No application process • Includes all employers and employees including self employed persons
– National Pensions Law (“NPL”) remain in effect
• Membership of employers and employees must continue • Administrators will continue to be governed by NPL National Pensions (Amendment) Law, 2020
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• Part 1: Suspension of Pension Contributions – Want to continue to pay contributions? • • • •
Permissible Employer and employee may agree to make contributions Contributions will be considered voluntary If contributions continue, employer remains responsible for paying them into pension plan
– Final Contributions Due
• March 2020 contributions were due 15 April
– Delinquent Contributions
• Employers remain liable for those contributions plus interest
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• Part 1: Suspension of Pension Contributions – Public Servants and their employers cannot participate • Specifically Statutory Authorities or Government Companies
– Contributions remain due as per the NPL
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• Part 2: Emergency Withdrawal – Eligibility
• Caymanian and non-Caymanian employees and self-employed persons
– Exceptions » Persons that have claimed normal or early pension entitlement aka “normal or early retirement”. » Public servants with pension contributions under the National Pensions Law that were paid by a statutory authority or a government company. • CURRENT public servant • Only past private sector employer contributions can be withdrawn • i.e: Contributions from ABC Restaurant because they are not a public sector entity • FORMER public servant • Can access contributions from all employment including statutory authority or Government company
• On Island or Off Island
– Persons must be present in the Islands OR – If off island, persons must have left the Islands on or after 1 February 2020
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• Part 2: Emergency Withdrawal – Withdrawal Formula
• Can withdraw from each pension account, a single lump sum of: – If balance is equal to or less than CI$10,000, then full amount can be withdrawn – If balance exceeds CI$10,000, » Persons can withdraw CI$10,000 AND » Up to 25% of the remaining balance.
– No requirement to repay the withdrawn amount – Highly encouraged to rebuild retirement savings
– Timeframe
• 1st May to the 31st October, unless extended by Cabinet. National Pensions (Amendment) Law, 2020
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• Part 2: Emergency Withdrawal – Application Process • Apply to/through their Pension Plan Administrator. • Application forms at: – Department of Labour & Pensions’ website (www.dlp.gov.ky) – Each Pension Plan Administrator’s website – Hard copies can also be obtained from the Pension Plan Administrator. » Copies will be available at supermarkets and post offices
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• Part 2: Emergency Withdrawal
― Application Process • Complete the application form • Copy of the member’s Government issued photo identification with the member’s signature that has been Notarized by a Notary Public or Certified by a Justice of the Peace. – A list of Notaries - Judicial Administration website (www.judicial.ky) • Link in the process of being posted on the Department of Labour & Pensions’ website (www.dlp.gov.ky)
• If member is no longer in the Islands and departed on and after the 1st February:
– Copy of the applicant’s airline ticket/itinerary or boarding pass with the application submission.
• Submit to Pension Plan Administrator
– Preference for soft copies – Hard copies will be accepted – ie: drop boxes
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Part 2: Emergency Withdrawal •
Timeline – Critical Dates –
Administrator shall: ― within 7 days of receiving the application, notify the applicant of its receipt; » If all of the requested documentation is not submitted, the application will be rejected. » The Administrators are not required to hold any applications, pending the receipt of outstanding documents. » Members are able to resubmit their application, once the required information is attached. – within 14 days of receipting the application, notify the applicant of the Administrator’s decision to approve or refuse the application; » If the application is refused, there is a right of appeal to the Director of the Department of Labour & Pensions. • In order to file an appeal, send an email to the dlp@gov.ky indicating in the subject line that it is an Appeal to the Director. • If the member wishes to provide the information in hard copy, the member should prepare a letter to the Director, and deliver it to the Department. • Due to the pandemic and ongoing curfews until the Department reopens, please call 345-945-8960 and leave a voicemail (which should also include an email address, if possible). A Department representative will contact the member to arrange delivery of the document.
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• Part 2: Emergency Withdrawal • Timeline – Critical Dates • Administrator shall: – within 45 days of receipt of the application, issue the amount in the form of a cheque or by direct deposit payable to the financial institution instructed by the applicant » US or KYD » Checking or Savings » Preference for direct deposit, given current pandemic » Cheques may take additional time
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• Part 3: Access to Additional Voluntary Contributions • Timeframe – 1st May to 31st October • Unemployed persons can immediately access their additional voluntary contributions – Apply to the pension plan administrator – Provide evidence of unemployment
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• Public Education – Frequently Asked Questions – www.dlp.gov.ky – Press Briefing – Chamber of Commerce Webinar – PR Events Schedule (under development)
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Department’s Contact Details – Website: www.dlp.gov.ky – Email: dlp@gov.ky – Phone: 945-8960
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