GEORGE TOWN, Cayman Islands (CNS) – People receiving a private sector pension under the Retirement Savings Arrangements (RSA) will be getting a 3.3 percent cost of living increase on the funds they can access each year. Director of Labour and Pensions Bennard Ebanks authorised an increase in the annual maximum disbursement amount from CI$12,480 per annum to 12,900, resulting in a monthly increase of $35, in line with the ESO’s position on the rate of local inflation.
The National Pensions Act permits members to access their money at retirement through an annuity or an RSA. The maximum annual withdrawal amount is determined by the member’s age and value of funds in their account. The age is defined as the age of the member at the start of the calendar year in which the payments are being made. This increase allows members to withdraw the new annual maximum, which is $12,900.
The option also remains for those not wanting to get funds through an RSA to terminate that arrangement and transfer their balance to an approved annuity.
Ebanks said the newly appointed National Pensions Board had supported his decision to increase the RSA. “We hope this increase helps to offset the Islands’ increased cost of living. It’s important that our senior and older persons be able to access needed funds afforded to them via their retirement arrangements,” he said.
Labour minister Chris Saunders said: “Our retirees and older persons have played an integral role in the development of the Cayman Islands and our present day economic success. It is vital that we ensure they are able to live a life of dignity and independence throughout their retirement years, increasing the annual RSA disbursement amount assists with this objective, which is a fundamental aspect of our Islands’ Older Persons Policy.”
In reality, the impact of inflation is distorted and it feels like much more than 3.3 percent for many people. The increases in prices of everyday items in the stores, soaring fuel costs as well as the level of health insurance premiums for retirees make life very difficult for pensioners. The new monthly payments under the arrangements which came into effect this month are $1,075 but without another source of income, most pensioners are struggling to survive.
The new annual increase came into effect on 1 April 2022 however, applications received prior to 1 April are subject to the disbursement amount based on the previous RSA figure.
Previously published Cayman News Service