Employers in the Cayman Islands have specific responsibilities under the National Pensions Act to ensure the proper management and administration of pension plans for their employees. Below are key areas of responsibilities: 

Maintain Accurate Records

  • Detailed Records: Keep detailed payroll accounts and records of all pension-related transactions.
  • Retention Period: Store all records for at least five years.
  • Employee Records: Maintain information for each employee, including:
  • Name and contact information
  • Employment start date and duration
  • Employment status (part-time or full-time)
  • Pay rate and salary arrangements
  • Gross and net pay amounts
  • Bonuses
  • Resignations and termination dates
  • Contributions made by both employer and employee, with proof of payment and contribution periods and dates
  • Any interest payments made to the Plan

Separation of Contributions

Clearly state and separate pension contributions from other payments like health insurance.
Employers are responsible for ensuring timely and accurate submission of pension contributions to the designated pension plan. This involves: 

  • Monthly Contributions: Calculating and submitting both the employer's and the employee's contributions each month
  • Deduction from Salary: Store all records for at least five years.Deducting the employee's portion of the contribution directly from their salary.
  • Timely Submission: Maintain information for each employee, including:Ensuring that contributions are submitted to the pension plan within 15 days after the end of each month
  • Receipt and Confirmation : Keeping records of receipts and confirmations from the pension plan to verify that contributions have been received and applied correctly.

By adhering to these responsibilities, employers can ensure that they are meeting their obligations under the National Pensions Act and providing valuable support to their employees’ retirement planning.

For a more details list of obligations, please refer to the National Pensions Act or contact our Administrative Agent, Saxon Administration (can you make a hyperlink and add our support email: support@verdantisle.org.ky). 

Compliance and Penalties

Ensuring compliance with the National Pensions Act is crucial for all employers. Failure to meet these requirements can result in significant penalties, including: 

Compliance and Penalties

Fines: Employers who knowingly and willfully fail to comply with record-keeping and contribution submission requirements may face fines up to CI$10,000.

Interest on Late Contributions: Employers who miss pension contribution deadlines must pay interest on the overdue amounts. The interest rate is calculated daily and is equal to the current prime rate in the Cayman Islands plus an additional 5%. This interest is added to any other fees, fines, or penalties required by the National Pensions Act or ordered by a court.

Additional Charges: Further fines and interest may apply for delinquent contributions.

Legal and Reporting Consequences

Reporting: Employers who miss contribution deadlines will be reported as non-compliant to the Department of Labour and Pensions.
Legal Action: Persistent non-compliance can lead to prosecution and additional fines.
Court Orders: Employers may be subject to court orders to correct non-compliance and ensure adherence to the Act. 

Notification and Publication

Employee Notification: Employees will be informed if contributions are not submitted on time.
Public Disclosure: The pension plan may publish the names of delinquent employers, potentially harming their reputation. 

Steps to Ensure Compliance

To avoid penalties and ensure adherence to the National Pensions Act, employers should:

Regular Reviews: Regularly review and update payroll and pension contribution records.
Timely Submissions: Submit contributions on time and keep proof of submission.
Employee Education: Educate employees about their pension plan and ensure they acknowledge their participation in writing.
Clear Separation: Clearly separate pension contributions from other types of payments.

For more detailed information on compliance and penalties, please refer to the National Pensions Act or contact our Administrative Agent, Saxon Administration, at support@verdantisle.org.ky. We are here to assist you in navigating the requirements and maintaining compliance.