Most will be aware of the proposed changes to the CINSF Act following consultations in Rarotonga and the Southern Pa Enua. Since its inception, CINSF have had two independent reviews done, one in 2009 and the other in 2022. In both reviews it was recommended that there be a change to the governance model that would see a change in the duties discharged by the Trustee, instead, leaving things such as investment strategy proposals able to be approved by the Board. We noted and agreed that the Auditor (Deloittes) would not change. It was pleasing to hear that CINSF align their governance practices with that of the International Centre for Pension Management.
Other proposed changes include changing the board composition. Currently the Board consists of one Chamber rep, one Workers Rep, a Member’s Rep, a Non-Chamber Rep with additional Board members able to be appointed as required by the Board. The proposal is that there will be one Employer’s Rep, 5 specialist Board members, and one Member’s rep. The devil of this detail will be in who decides who these people are and if there is a selection panel, who will be involved and appointed to that. While we agree that all board members should pass the fit and proper person test, the introduction of a board code of conduct, performance assessments (of board members) and appropriate skills and experiences, we would not like to see the majority of board members be from outside of the Cook Islands.
An option presented with respect to Member Benefits is to amend the current rule of any changes recommended by the Board being subject to the approval of the Trustee to Member Benefits be placed into Regulation. This the Chamber strongly disagrees with. We consider that putting any change to Member Benefits into the hands of politicians would remove the impartiality and may result in Government interference. The current Pension for Life Benefit does not recognize the modern day make up of families and we agree with the proposed additional benefits which give the pensioner themselves the decision to choose which type of benefit they would like. There is still no advancement on including benefit categories for a person not identifying as neither male or female, and would we like to see this included.
There is a proposed change to contributions rates, options given were to have no change; an increase from 5% to 6% in 2025, or, an increase from 5% to 7.5% over 5 years at 0.5% per year. The Chamber would like to see no change in the current contribution rates but we would propose to have this reviewed every three years. We would also like to see any proposed changes to contribution rates considered only after extensive economic and social impact analysis. There are a number of sole traders who do not comply already with the 10% they are required to contribute being both the employer and the employee, and we would not like to see an increase in the informal economy a result of contribution rates being set too high.
Finally, the Chamber continues to disagree with the employer paying their portion for the life insurance component of the pension, while also paying for the life insurance premium for any work-related death via the workers compensation.
