An investigation has been launched into the slow pace of payouts by some pension administrator firms under the government’s emergency pensions withdrawal scheme.
The early withdrawal option was mandated by the government in The Department of Labour and Pensions (DLP) says its currently reviewing multiple Pension Plan Administrators with regards to processing timelines to ensure they comply with the National Pensions (Amendment) Law 2020.
It says “while it is largely believed that a significant portion of the applications are being processed in a timely manner, where there are breaches of the timelines set out in the Law, DLP are actively preparing files to be submitted to the Office of the Director of Public Prosecutions.
Firms have a 45 pay period to process applications but there have been numerous complaints about the way some companies have been handling the requests by their clients.
The law stipulates that eligible persons are able to apply to withdraw from the 1st May to the 31st October, unless extended by Cabinet.
It further specifies that: “The Administrator has forty-five (45) days from the date of receipt of the application in order to issue the payment to the member, either by cheque or direct deposit.
“Due to the pandemic and the need for social distancing, persons will be paid via wire transfer and the only exception will be persons that do not have bank accounts in which to receive the payment. If that is the case, those persons should contact their Administrator to arrange for an alternative disbursement method.”
The administration process for paying out requires that once the Administrator receives the application and supporting documents, they shall within 7 days of receiving the application, notify the applicant of its receipt and within 14 days advise them whether their application is approved or refused.
Persons who applications are rejected have a right of appeal to the Director of the Department of Labour & Pensions.
It could not be immediately determined just how many persons have applied to withdrawal all or a portion of their pensions to date, but payouts have been made well over CI$ 20 million by some conservative estimates.
Many pension administrator companies only resumed full operation since the Level 2 ‘unlock’ came into effect on June 22nd, although many of their staff have been working remotely.
The NP (Amendment) Law 2020 states that an administrator who does not comply with subsections (9), (11) or (13) commits an offence and is liable on summary conviction to a fine of ten thousand dollars or to imprisonment for a term of one year, or to both.
The issue came up for extensive scrutiny in a recent sitting of the Public Accounts Committee in which pensions managers gave evidence in-person and remotely.