As it stands now, in terms of dollars and cents, ultimately, the absence of such a law makes it “more expensive to employ Bermudians.
But according to Curtis Dickinson, the Minister of Finance, that’s about to change.
Updating MPs on “recent developments and proposals under consideration” on Bermuda’s National Pension Scheme on Friday, he said further amendments to provide “more withdrawal freedoms” are pending.
This after recommendations submitted by the Pension Commission.
“The Commission has also recommended further amendments to the Act to provide for more withdrawal freedoms for plan members at retirement and extending the scope of financial hardship applications to include funeral expenses, removing the restriction on persons receiving a pension from being able to apply and including off campus housing as an eligible educational expense,” said Mr Dickinson.
The proposed changes were promised in the Government’s 2017 Election Platform pledge to “address the current structural imbalance of pension benefits that exists between guest workers and Bermudians by requiring equal treatment for Bermudian and expatriate labour”.
The National Pension Scheme (Occupational Pensions) Act 1998 was “introduced to provide for the registration, administration and funding of mandatory occupational pension plans in Bermuda and related matters”.
The legislation “has been amended over the years to better address the needs of the members of pension plans with the most recent relating to financial hardship withdrawals in 2010 and 2011”.
“As the supervisor and regulator of occupational pension schemes”, the Commission conducted “a review” and “recommended a number of significant enhancements such as to provide it with more effective regulatory and enforcement powers, introducing regulatory fees and monetary fines for non-compliance, reducing the audit burden on small pension funds, increasing the existing small pension amount that plan members can receive in a lump sum and to provide the Commission with the power to exempt plans from specific requirements under the Act”.
The Commission’s Advisory Committee “is made up of a wide range of private sector representatives”. The Ministry also “made a request to the Commission to seek industry feedback on this proposal”.
“The standing Committee is comprised of representatives of third party plan administrators, law firms, unions, employers, international companies and the accounting profession.
“In addition, representatives of the Association of Bermuda International Companies, Hotel Employers of Bermuda, Restaurant Association, Construction Association of Bermuda, Landscaping Association, Bermuda Human Resources Association and a former board member of the Human Rights Commission were invited to make representations on the implications of introducing the proposal on their respective industries or areas.
The Minister also provided the following comments and recommendations submitted by the the Commission’s Board and considered by the Advisory Committee:
- The Commission supports the international labour principle that pensions are good for all employees
- The current legislation should be amended to require all non-Bermudians satisfying the eligibility requirements to be enrolled in a registered pension plan
- Exemptions should be provided for non-Bermudian work permit holders employed for a short-term (i.e. two years and under). However, upon receiving a renewal of their work permit they would be required to be enrolled
- Non-Bermudians leaving Bermuda permanently should be able to receive their accumulated pension balances, as is currently the practice
- The current contribution rates (5% for employers and 5% for employees) should be phased in for non-Bermudians, as was the original practice when the legislation was first introduced for Bermudians and their spouses
- It could be argued that the current exemption is contrary to the Human Rights Act as it appears to discriminate against non-Bermudians based upon their national origin; and
- The Commission recognized that some employers have a competitive advantage and benefit from a lower cost of operation by their employment of non-Bermudians and the savings that result from not having to make the required pension contributions into a pension plan for these type of employees
“Accordingly, I can confirm that during the next legislative session a Bill containing all of the proposed amendments will be tabled and debated in this Honourable House.”
Once introduced, he said the proposed enhancements will “represent the most significant legislative change since the Act was first introduced.
“They are sensible, reflect the needs of the members of pension plans and are in line with pension provisions and regulation in other jurisdictions.
“As this Government continues its time in office, the proposed amendments to the National Pension Scheme (Occupational
Pensions) Act 1998 represents just another step in our efforts to establish a better and fairer Bermuda that was promised in our election platform.”