Robert Hart, Parliamentary Reporter
NEW LEGISLATION to tighten the regulation of pension funds could potentially derail the operations of the nation's $100 billion pensions industry, a spokesman for the Caribbean Actuarial Association told a Senate Committee of Parlia-ment yesterday.
The association supported by Dr. Marshall Hall, head of the St. Mary and Eastern Banana Estates also said penalties contained in the Pensions (Super-annuation Funds and Retirement Schemes) Act have scared trustees away from the industry.
"Already, a number of trustees to our funds have tendered their resignations," Dr. Hall told the committee, which has begun deliberations on the regulations governing the implementation of the act.
He suggested the resignations were a result of the trustees' fears of future prosecution under the tight strictures of the new law.
ACT APPROVED
The act has already been approved by both Houses of Parliament and was brought into law in March to the dismay of senators who complained bitterly yesterday that they should have been allowed to approve the regulations first.
According to the legislation, trustees could be convicted for, among other things, failure to make returns to the Financial Services Commission (FSC) or to give the FSC information in the time required.
"Some trustees are refusing to remain as trustees, while some are being practical and want compensation for acting as trustees and trustee indemnity insurance," added actuary Ravi Rambarran, who represented the actuarial association.
Government Senator Keste Miller lamented that the regulations sought to penalise trustees for their actions without consideration of intent.
"We don't have a den of criminals here. We have people with a good track record, so we should keep the policing to a minimum," he added.
Mr. Rambarran outlined the immense multimillion-dollar expense that would be incurred by pension funds under the new legislation which requires increased reporting and the payment of fees to the FSC.
The impact on pension funds, Mr. Rambarran added, would be a "dampening in growth of savings that worsens with time".
He suggested that the Government re-evaluate the information requirements and use what is already available in the industry, but with tightened turnaround times.
Yesterday, Dr. Hall argued that the recommended fees for the pension industry could discourage both companies and employees from creating or joining pension funds.
Dr. Hall proposed that a fee of one per cent of each member's contribution to the pension fund be implemented instead.
