Cabinet approved a new Commencement Order to bring into force parts of the National Pensions (Amendment) Act, 2016.
“We welcome the commencement of these provisions which will fortify the pension regime whereby non-compliant employers will be held more accountable, members will be provided with greater information, administrators’ responsibilities will be increased and the Department of Labour & Pensions will be strengthened”, said Director of Labour & Pensions Bennard Ebanks.
Using a phased approach, the Commencement Order has varying effective dates with the first effective from 1 January 2023 whereby all Pension Plan Administrators (PPAs) will be required to host Annual General Meetings (AGMs) and provide members with statements on a semi-annual basis, which can be issued electronically or hard copy, with the members’ consent. While some PPAs voluntarily provide AGMs and frequent statements, these changes are important revisions which establish an opportunity for all members to attend an annual meeting with their pension plan administrator to learn more about the plan and discuss their concerns.
Furthermore, the increase in statement frequency from annual to semi-annual will provide members with more information about the plan’s expense ratios and investment return as well as their employer’s payment of the required monthly pension contributions.
Commencing 1 March 2023, a number of sections will commence starting with the Department of Labour & Pensions’ (“DLP”) requirement to publish a list of all registered pension plans, their PPAs as well as the agents of the PPAs, ie: key service providers. The additional information will allow the general public to have an official list of registered pension plans so they can verify that their pension plan is properly registered with the regulator.
From an enforcement perspective, new key provisions will be the Court’s ability to impose higher fines and possibly, imprisonment for employers, on summary conviction. Magistrates in Summary Court have expressed their perspective in open Court, on several occasions, that stronger penalties were needed for employers to take offenses seriously.
Effective 1 July, PPAs will be required to notify the employees of a delinquent employer, within 60 days of notifying the DLP. In order for the administrator to fulfill this requirement, pension plan members are encouraged to contact their PPAs to update your contact information including email or mailing addresses.
PPAs will also have an obligation to collect interest on delinquent contributions as well as take action when an employer is delinquent including contacting the employer or employees in relation to the issue. If it is not resolved, then the administrator will report it to the DLP, and after 60 days, notify the affected employees. In addition, the PPAs will have the option of publishing the names of the employers.
Additionally, the DLP can demand the appearance of a delinquent employer in order to address the pension arrears and will also have the authority to publish breaches under the National Pensions Act. These provisions are added to the ongoing ability to establish payment plans and prosecute employers for offenses.
In October, an Administrative Penalty System will be introduced which will create another enforcement tool for the DLP, similar to other departments with an enforcement mandate.
The requirement for on-going PPAs training will also be introduced in October. As a result, all new and ongoing PPAs will be required to provide the DLP with supporting evidence of their training on the management, administration and investment of the pension plan. Additionally, training on the National Pensions Act as well as the PPAs fiduciary duties are requirements.
The enactment of the Commencement Order will ensure that the DLP can fulfill its obligations under the National Pensions Act and effectively enforce the legislation as well as enabling the Courts to effectively dispose of related cases.
Deputy Premier and Minister for Border Control & Labour Hon., Chris Saunders said “the commencement of these sections of the National Pensions (Amendment) Act are long overdue. It’s important that pension providers educate their members on the pension plans they are entered into and for employers to remain in compliance with the regulations that guide them. The National Pension Act was enacted for the benefit of employees and these changes were made to increase transparency and members' engagement. It is therefore important that employees take the time out to understand their Pension Plans to better plan for their future."
The remaining few provisions of the Amendment Act are to be implemented in a phased approach, after the review of the existing National Pensions (Pension Fund Investments) Regulations. Any future amendment proposals or changes will require Cabinet approval before implementation.
To read the National Pensions (Amendment) Act, 2016 Commencement Order 2022 visit www.dlp.gov.ky or for further enquires contact 945-8960 or email dlp@gov.ky.
Source: gov.ky