“I do predict the sale of 70″ TVs from Cost U Less, jewelry stores and the auto dealers is going to be quite higher over the next several months and given the addiction of people who live in Cayman and by this, I want to make very clear I don't mean Caymanians, I'm talking about people who live and in work in the Cayman are addicted to online shopping this is not going to benefit the economy.”
Brett Hill, June 19, 2020 – Public Accounts Committee
(CMR) Fidelity Pensions Limited has admitted to having some serious challenges meeting the requirements of the COVID-19 emergency withdrawals according to Brett Hill, President and CEO. He is expecting to be in breach of the law with at least a thousand members according to this testimony today to the Public Accounts Committee.
Despite numerous internal issues, in the final analysis, he blamed the government for what he considers hasty legislation and an unformed public anxious to get their pension money to purchase luxury items like televisions.
Fidelity has been struggling to meet the requirements of the recent amendments that allow people to withdraw from their pension funds during the COVID-19 shutdown. The public has been extremely critical of Fidelity Pensions in particular.
He shared that they have had to hire a public relations company in order to help them manage this “crisis” and bad publicity that has ensued. Sharing the public's lack of confidence in Fidelity Pensions has taken its toll he noted:
“I don't want to say marl road because it may infer, Cayman Marl Road, but the marl road in a broader sense and I have therefore had to retain a PR company to deal with that aspect of it,”
These comments were shared with the PAC earlier this morning where he also claims that they have received “very serious threats from the public.” He shared he would not go into the details but some of the threats they received “have not been terribly pleasant”.
Currently, there are only three staff members in the Cayman Islands but additional support has been pulled in from their overseas office. In addition to the increase in staff complement, he has also invested in new IT software with NetClues and is also looking to lease a new office space next month.
According to Hill, the problem stems from the perception people have of pensions -they see it as a tax at the best of times.
Hill said that of his 11,000 members over 3,000 had applied for early withdrawals from the pension scheme.
“There seems to be a slowing down but we are up to 3,000 odd people who have applied which you will appreciate is a very large volume and we are also dealing with a high volume of phone calls and a lot of negative PR, “
Hill told the Public Accounts Committee.
The vast majority of those persons requested the full withdrawal amount allowed by law.
In addition to staffing issues, Hill mentioned that limits to the electronics funds transfer system created some additional issues.
Chris Saunders inquired about concerns of the relationship management aspect of things given they only have three employees in pensions. He wondered if the breakdown of staff to registered companies ratio was a bit of a stretch since each employee would be responsible for about 1,000 accounts. However, Hill shared that until this law was passed there were “no PR issues.”
Saunders said he was sympathetic towards the increase of individual member applications now expected to be processed and “there should have been some level of patience that should have been expected from the public.”
Hill further shared that his concerns that the 45-day limit is impossible to meet were ignored. He explained that because pension plans are based on funds of funds payouts a more realistic timeframe would have been 60 days.
Applications submitted in May must be paid from the May NAVs and it takes the funds between 12-14 days; leaving them one day to “turn that around and pay people. It simply is not possible.
This is despite the fact that other much larger pension administrators have been able to payout well ahead of the 45-day deadline. In fact, Silver Thatch has now paid out 99% of their May claims and then have double the number of members as Fidelity.
Admitting that he would be in “transgression of this law at least a thousand times and could be sentenced to a thousand years in Northward prison” he assured PAC that most May payouts would be done before the end of June. A $10,000 penalty is also possible per transgression.
Hill shared his views that allowing people to obtain
He disclosed that he also had an issue with people being able to withdraw so much from their pension plans and he expected an uptake in non-essential luxury spending.
Hill is the second-largest pension holder in the Fidelity pension plan. This is the second day of the pension topic being heard by the PAC.