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SAUNDERS’ PENSIONS WITHDRAWAL INITIATIVE APPROVED

Government 19 Jun, 2023 Follow News

Premier Finance Minister Hon Chris Saunders

By Staff Writer

It’s now possible for eligible persons to make larger withdrawals from their pension accounts, thanks to a change in the law initiated by Hon. MP for Bodden Town West, Chris Saunders.

Under the Saunders initiative, individual withdrawals of up to $CI 50,000 per person and CI$ 100,000 for couples is now possible.

It also allows for personal withdrawals of CI$100,000 to clear off the balance on a mortgage, and twice that amount for married couples.

Another benefit is using the scheme to secure a mortgage downpayment of up to CI$ 50,000, increased from CI$ 35,000.

While he secured support broad support from government and opposition legislators for these amendments, several other proposals were not accepted or were otherwise referred to a Parliament Select Committee for further scrutiny.

They include proposed pension withdrawals to cover the costs of education and home repair.

Mr Saunders said many people are already facing serious financial challenges, and being able to access a portion of their accrued pensions would provide vital relief.

“If we don’t start doing something the dignity gap in this country is going to become an issue. People are proud. People need help. We have to do something…Doing nothing was not an option,” he stated, thanking his colleague legislators for their support of his plan.

PANTON: CAUTIOUS SUPPORT

Hon. Premier Wayne Panton, who took over the reins of the finance portfolio following a split with Mr Saunders from his PACT coalition, while being lukewarm on some of the other proposals, gave his backing to the core elements.

“People have obligations now that they’re looking at and saying ‘How am I going to make these ends meet?’ So, allowing and supporting a considered provision for cases of allowing the mortgage amounts to be increased. Mortgage payoff amounts to be increased, allowing a higher increase for the downpayment on a residence, these are all things that we think we are happy to support at this point.”

However, the Premier stressed, “It is really important for us to be able to get this information through Select Committee to be able to get the full picture.”

PENSION REFORM

One constantly recurring concern during the debate was the state of the pension scheme and its long-term sustainability, along with the impact of global financial trends on the fund’s performance and viability.

Hon. Leader of the Opposition, Roy McTaggart, said while they backed the Saunders initiative, there was an underlying need to overhaul the existing pension scheme.

“The current pension regime needs to be reviewed and a new direction is taken to deal with the needs of retired and retiring Caymanians. Most people will unlikely have enough of a pension to live comfortably in retirement for their remaining lifetime. We are seeing that emerge with the system that we have. It’s an issue now, and it will only get worse as we move forward unless it is addressed.”

COVID SCHEME

Referring to the COVID-19 pensions withdrawal which saw an estimated CI$ 500 million taken out of the system, the former finance minister who oversaw that emergency measure, reflected on the concerns then raised about the viability of the pensions scheme at that time by Mr Saunders.

“Figures mentioned of almost $500 million dollars or half a billion dollars that were withdrawn in 2020 when we allow for the withdrawals to assist people. That represented above in round terms 25% of the total amount in the pensions account at the time…So that plus all the other issues that we have identified over the years have got to be addressed in any sort of pension reform that takes place.”

Hon. Minister responsible for pensions in the PACT Cabinet, Dwayne Seymour, said he was mindful of the other issues surrounding the challenges to the pension scheme.

“I pray some people don’t see in approving this amended motion as irresponsible for again allowing further raid of their pension accounts,” he said, referring to the COVID emergency pensions withdrawal while he was Heath Minister in the previous PPM government.

“When people are hurting, we need to act urgently to help our people out of this rut that not only our people but all of us are in,” he declared.

TOUGH CHOICES

The Saunders motion was seconded by Hon. MP for West Bay West, McKeeva Bush who noted that while the motion “can assist those people who are in bad shape financially” there are related pensions issues which the Select Committee needs to address.

“Is it possible to help those persons retired and on pension by raising their pension by a few hundred dollars per month to make it better than $1,000 per month? “ he asked. However, Mr Bush also said the Select Committee would need to confront any issues arising from that.

Acknowledging the tough negotiations among MPs to reach a consensus on the Saunders motion, Tourism and Ports Minister Kenneth Bryan made this observation: “The government recognised that we’re going to get a lot of criticisms by some for what this motion is suggesting. We’ve done everything we possibly can within the parameters of the current circumstances of the difficulties that people are facing. With global inflationary prices, we have to do something but we do not want to put the (pension) fund in jeopardy,” Mr Bryan stated.


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