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Pension 101



Your Contributions


If you are employed in the Cayman Islands, both you and your employer must contribute towards your pension. The contributions that both of you make are related to your total earnings. Total earnings include salary, wages, leave pay, fees, commission or gratuity, as well as bonus payments that are more than 20% of your basic pay. Earnings do not include severance payments, retirement long service recognition payments, and health insurance premiums that are paid by the employer. Anyone earning more than CI$87,000 is not required to make pension contributions on the amount of earnings above CI$87,000 in a calendar year, although they may choose to do so voluntarily. Employers are only obligated to make contributions on the first CI$87,000 of income.


Every self-employed person must contribute a sum equivalent to 10% of their earnings up to CI$87,000 at a minimum.


Employers are required by law to contribute an amount that is no less than 5% of your earnings. As an employee, you should not be required without your consent to pay more than 5% of your earnings.


The employee’s contributions must be deducted at regular intervals, and together with the employer’s contribution, paid directly into the pension fund. Contributions must be made within 15 days of the last day of the month in which the contributions were due. Late contributions will be subject to interest.



Eligibility

By law, every employer in the Cayman Islands has to provide a pension plan for its workers. Those that don’t are committing an offence and can be heavily fined. This means that anyone working between the ages of 18 and 65 must be a member of a recognised pension plan, even if they are self-employed, working part-time, are casual workers, probationary staff or on short-term contracts, in fact anyone working must have a pension plan.


If someone has more than one employer, then each employer must pay into the employee’s pension plan.


Expatriates are allowed an initial nine months (grace period) before legally having to begin paying pensions.


If you leave the island between employers for more than three months, then your 9 month grace period starts over.


The only people excluded are employees who are non-Caymanian or non-Permanent Residents that are employed as a "household domestic" (e.g. maid or a gardener) in a private residence.


You can also visit www.dlp.gov.ky for more information about pensions in the Cayman Islands and download a copy of the National Pensions Law.



Basic Contributions

The money that each of you deposit into your pension is called your basic or mandatory contribution. When you are a member of the Chamber Pension Plan, the contribution automatically gets deposited into an account in your name, and then it’s invested into one of our Chamber Lifecycle Funds (read more about Lifecycle Funds). Which Fund your money gets deposited into depends on your age on the date you join the Plan. Your contributions will continue to be placed into this account until you retire, or elect to transfer your assets, if you are eligible.


How your money is invested changes over time, with the type of investments reflecting how long you have until you reach the normal retirement age, according to the National Pensions Law.


Lifecycle funds take the guesswork out of investing, because they automatically adjust the allocation of assets they invest to reflect your evolving investment needs and goals.


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