From the 1st June 1998, every person aged 18 to 60 years who is a member of a defined contribution pension plan must contribute to that plan. This is a requirement of the National Pensions Law (2000 Revision) and by subsequent regulation (the Pensions Law).
The contributions are related to total earnings, which include salaries, wages, leave pay, fees, commissions or gratuities, as well as bonus payments that exceed 20% of basic pay. There is an upper limit to earnings specified under the Pensions Law for this purpose; this limit or cap is CI$60,000.
Under the National Pensions Law the Administrator of the pension plan must notify the Superintendent of Pensions in writing of any arrears of contributions within 45 days of becoming aware of the arrears.
An employer shall be liable to pay interest to a pension fund on all money that is due to be paid by him/her to that pension fund. Interest is at the current Cayman Islands’ prime rate plus 5% calculated on a daily basis.
Self-employed individuals are also required to contribute to a defined contribution pension plan every year during employment – a sum equivalent to 10% of his/her earnings for that year.
The benefits of any pension plan must be in accordance with those stipulated by the Law and the pension plan itself must be registered in accordance with the Law.
The National Pensions Law requires that contributions are paid to a registered pension plan based, typically, on an amount equal to 10% of your earnings. Of that 10%, your employer will pay 5% and deduct a matching 5% from your wages up to a maximum pensionable salary of CI$60,000. All money that your employer deducts or is obligated to match must be paid to a pension plan by the 15th day of the month following the deduction. If your contributions are not paid within that time frame then your employer will be required to pay interest on those late contributions at an annualized rate of the Cayman Islands prime lending rate plus 5%.
The Law may change the level of employee contributions however; we will keep you informed of any changes.
Additional Voluntary Contributions
Once contributions are received in cleared funds they will be used to purchase units in your Silver Thatch Pensions Plan, which will be registered in your name. The number of units that are purchased depends upon the price of the units as of the contribution date.
Contributions received in cleared funds by midday at least three business days before the date on which the price of units is calculated will be applied at that time in the purchase of units. If contributions are not received on a timely basis they will be held until the next time units are priced.
The contribution date is on the first business day of each month.
The price of units is calculated by obtaining the value of the investments of your Silver Thatch Pensions Plan from the custodian, deducting the costs and expenses (including the remuneration of the administrative services agent and investment manager) and dividing the net amount by the number of units which are already in issue. This gives a price per unit. Your contributions will be used to purchase as many units as possible at this price.
The price of units will vary from time to time depending on the value of the underlying investments of the Silver Thatch Pensions Plan, and therefore, you will not always receive the same number of units each month for your contributions.
Additional Voluntary Contributions
In addition to the mandatory contributions, you are able to make Additional Voluntary Contributions (AVCs) from your salary if you wish.
You cannot cash in units purchased with additional contributions except on retirement or as otherwise permitted under the Silver Thatch Pensions Plan.
Documents and Information Available
The Law does give you certain rights to information and documents relating to your Silver Thatch Pensions Plan.
You should receive from your employer or directly from the administrative services agent, within 30 days of beginning work, a copy of the Member Handbook explaining the provisions of the Plan and your rights and obligations under the Silver Thatch Pensions Plan.
You will also receive an annual statement from the administrative services agent setting out certain details relating to your membership of the Silver Thatch Pensions Plan as required by the Law.
To learn how your investments are doing and gain access to more documents and information, use the username and password that you were provided upon registration (Click here if you forgot your credentials) to access your personal and confidential pension information through our secure online member services.