MP Terry Lister On National Pension Scheme

March 27, 2014

Independent MP Terry Lister has called on the Minister of Finance to take an amendment to the House to enable the National Pension Scheme to “better reflect the needs of the people today.”

Mr. Lister said, “On Friday, November 22,2013 I rose in the House of Assembly on the Motion to Adjourn to raise concerns that I have regarding the National Pension Scheme which is governed by the National Pension Scheme[Occupational Pensions] Act 1998.

“That evening I raised three issues:

  1. That upon retirement people should be able to have a lump sum payment of up to 25% to allow them to eliminate existing small home mortgages and similar debt;
  2. That small pensions should be paid out in full rather than having the pensioner receive very small amounts monthly; and
  3. That small sums not yet vested should not be allowed to be paid out when persons changed jobs.

Mr. Lister continued, “Since November, I have been in dialogue with the Minister of Finance, the chair of the National Pension Scheme board and the administrator of the Scheme. The exchanges have been positive and it is my wish that the Minister, having completed the Annual Budget, can focus on the changes that are needed to make the National Pension Scheme work for all retirees.

“I should point out that the 5% and 5% monthly contributions in many people’s cases may not be sufficient to produce a livable pension. In these cases persons should consider making additional “voluntary” contributions, no matter how small.

“Doing this benefits in either of two ways depending on life’s outcomes. In the first case the person has something to fall back on in the case of a rainy day, such as today, as the contributions are voluntary thus they can be withdrawn if needed; secondly these funds, if they remain in the plan, boost the size of the person’s pension at retirement.

“With regard to the first issue of lump sum payment at retirement it has been agreed that this will require an amendment to the Act and that the Minister should look at this with a view to determining either the appropriate dollar amount or percentage of the fund that can be withdrawn lump sum. This would be a one time payment which could be easily administered.

“With regard to the second issue, I have learnt that, in fact, very small pensions can be paid out in full now. However, the upper limit for a pension sum to qualify for such treatment is $4,441. Clearly this amount is outdated and we are in agreement that the Minister should amend the Pension Scheme to allow the full withdrawal of one’s pension at a higher level. It will be for the Minister to determine what that level should be.

“Lastly, there is agreement that plan members be locked in as to their non vested contributions. The principal reason for this decision being that time has shown that once withdrawn these funds are seldom repaid into the Scheme. I again look to the Minister of Finance to take an amendment to the House to enable the National Pension Scheme, now in its sixteenth year, to better reflect the needs of the people today,” added Mr. Lister

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Comments (28)

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  1. Serious Though says:

    Thanks Terry!

  2. Justin says:

    I agree that it would help seniors to get a bit of a lump sum at the front, but can the system afford to do it? Although you can argue that the money taken out would go directly back into the Bermuda economy. Maybe there should be stipulations on what you can use the lump sum for? For example, you can’t have seniors taking out 25% of their pension and then hitting up the casino!

    Now I can see why Lister left the PLP, because he must have been the only rational thinking MP within the party. Clearly he doesn’t subscribe to the “Party Before Country” mantra of the PLP which must have been a real issue within the party hierarchy.

    • Triangle Drifter says:

      Well if he felt so strongly against how the PLP did things, why did he not bail on them much sooner? Guess he figured that they would get back in & he wanted to be part of the winning team. Surprise!

      By sitting as an independent, even though he rode in on a PLP horse, he thinks he has more influence all round.

      Looking out for #1.

      • Justin says:

        Maybe he was going for change from within, perhaps? Everything else aside it is still refreshing to see pertinent issues being discussed and constructive suggestions being brought forth.

      • Robert says:

        Mp lister is a big man than that

        • Cleancut says:

          Lister wanted to be PLP leader, so he picked up his marbles and left.

      • ….Surely you jest. says:

        Careful, your media has blessed Terry as “a truly independent voice” and hailed him as the right stuff. Stick to your script.

    • Evie says:

      I am a few years away from retirement I have always worked very hard for my money I have never really been without a job so always contribute to this system never been sick really have not been a drain to my jobs or insurance company bought my own home put my children through college n make a decent wage there r plenty of us that have paid every week religiously so now u gonna tell me how to spend my money Justin b quiet children

  3. Kangoocar says:

    I happen to think this whole private pension thing should be made voluntary, I actually have no faith in the stock market because it has been proven over and over that those at the top are the only ones that make money out of it, they are the ones that see the dips heading our way long before the average Joe blow does and they always seem to get out just before the crashes, leaving the little guys to hold the bag!!! But it is what it is, and I am supporting Terry on this one!!!!

    • Portia says:

      Kangoocar, why fear the stock market? Over the past 80 years, the stock market has consistently offered returns well above the average of what you would find on your standard CD or savings account – even with the occasional crash.

      The problem is, the average Joe Blow does not realize this, they try to time the market, and so they pull their money out when the market goes down, thus actualizing their losses. The guys at the top do not do this, instead they BUY more shares when the price is way down, thanks to the sell-offs by average Joe! This is how the rick get richer – and why people who stayed in the market during the 2008 crisis have seen it pay off for them.

      The secret is not timing the market – but time IN the market.

      • el says:

        actually lots of people I know lost money, that is why the country is in a pickle now!!!I don’t agree that I should be forced to pay other people to manage my affairs when they ahve no proven ability to do so and it is MY MONEY that is going to assist them in having a bogus job to handle a grown womans affairs! I resent the imposition and just because you benefitted doesn’t mean it works for people in a certain pay scale, I lost no money and gained interest during the recession because I invested 100% don’t need anybody to manage my trust,… the money should be available to me on demand..We are not allowed to gamble yet we literally pay people to gamble with our hard earned dollars so they can maintain a job, its worth than SANTA CLAUSE getting credit for the work of parents! It is also theft to the highest degree! You may think it is worthy but we never had it years ago and we as Bermudians were far more successful and had far more money than now, because we were so successful the schemes and programmes started to become more prevalent! Yhis Corporate Business is headed out the door forever anyway so hope you can handle your own affairs! and be free to invest or not wherever and whenever, with whomever.. It is so unfair that we pay taxes, compulsary insurance and are not allowed to have ten thousand dollars or more put in our account without out being questioned!!!Are we children? the same children that have kept and maintained this island before IB decided to pounce on us and surreptitiously swindle our money! you call it fair I say Foul!

      • Kangoocar says:

        Portia, what you are saying has been correct up until now, but we are now living in different times and the US debt along with the worldwide debt is going to kill the stock market soon! The stock market is in a bull trap that is going to hurt a lot of poor people that are paying into it through mandatory pensions and it is not going to be there for them, as many are aware and ” swing voter ” stated, we are paying into these pensions that have negative balances already!!! I just prefer to do things my way and find it offensive that I am forced to pay into something that I am totally against!! I have done very well for myself doing it my way and only consider this pension stuff a business expense!!! It will not be there when the majority will need it and then what??? Gold and silver is what I believe in and have bought as much as I could over the years and I am totally confident it will pay off big time when the time comes that the stock market does the BIG crash, the stock market is built up on a false foundation and like a any structure that is built on a weak foundation, it surely will come down!!!!

  4. swing voter says:

    not impressed lister! we all know its ghost money yur tryna manage….it doesnt exists….Im paying into a system with a negative balance

  5. frank says:

    well I agree with all but point number 3 if on works for an employer for a short time and has say $8000 locked in at age 65 that person would get about $35 a month so why not let that person take the money and invest it
    now the government pension is nothing more than a Ponzi scheme
    if you die before 65 no one get your money

    • Sandy Bottom says:

      He’s talking about private pensions. His suggestions are all very well, except they increase the chance the pensioner will run out of money late in life. It’s just the kind of problem the pension scheme was meant to avoid.

  6. pebblebeach says:

    Mr Lister…or others….Pardon my ignorance…I gather we are talking private and government pensions…in the case of a private pension for which I have and believe they offer annuity products that pay out over 5, 10, 15 and 20 years along with a lifetime payout.

    In each of the 5, 10, 15 and 20 year annuity products, you can leave the balance of any unpaid funds to a beneficiary in the unfortunate event of your death before expiration of the product.

    Is it true that if you elect a lifetime payout product, have worked 50 years and amassed a total pension valued at $1,000,000.00 and e.g. you receive one actuarially determined pension payment one month ($3,333.33) after retirement and die, the balance that you have amassed of $996,666.67 is kept by the insurance company for its shareholders.

    Now that is what needs to be changed if that is the case.

    • el says:

      @pebblebeach– you should be throwing big rocks!!! that is exactly so!, we have been duped and swindled for years, that is how they(ib/insurance co.) make their commission, when the owner of the trust dies, the selected beneficiary receives the balance of what you have contributed, however; the rest goes to insurance company,, total strangers who we are slaves to, because our politicians that we elect, have elected other entities to take care of that part of the administration of our trust.!

    • Sandy Bottom says:

      You have a choice. If you’re 70 years old and want an annuity that pays for 25 years whether you live or die, you can get it. That might pay – say – $10,000 a month. Or, you can get an annuity that pays up until you die, and that might pay $20,000 a month. You have the choice. It is not a scam or a swindle, it’s a choice.

    • no more democracy says:

      Tell the whole truth, the flip side of passing away before receiving the full 1mill,is out living the 1mill snd continuing to be paid. You can’t hsve it both ways. Improvements can be made but let’s be honest.

    • looking and listening says:

      @pebblebeach. The insurance company has no right to the remainder of your money. On your death whomever you have assigned as your beneficiary will receive $999,666.67. Rest assured.

      • Pebblebeach says:

        Thanks, as I was under the assumption that when you elect the lifetime payout annuity, pension payments terminate upon your death. Will certainly seek absolute clarity on that matter for sure..

      • Family Man says:

        Not true. Once you have selected a life annuity payments end with the end of your life. There are options such as life with a minimum term etc. but a simple life annuity finishes when you die, even if its the next day and the insurance company no longer pays out anything.

  7. Raymond Ray says:

    What would be good to see done is this, that all (present and past) Govnt. Ministers receive a fixed amount of dollars instead of the sums of money they receive presently.
    Once they’ve served the “people” then they too need to be getting what everyone else gets, no-more and no less!

  8. In short says:

    In short, he knows nothing about compound interest and has no idea what the impact of this would be on an already grossly underfunded pension scheme. Please protect us from his ilk.

  9. js says:

    pension funds are the litmus test for the future stability of Bermuda’s economy and society as a whole

    the collapse of the pension fund system appears imminent

    any economic system that relies heavily on temporary foreign labour to the exclusion of long term native labour who will ultimately become its pensioners will suffer a pension crisis

    if Lister really wants to make a difference he needs to open up a public discussion about how many Bermudians who are not in the public sector actually have pensions and if so are making regular pension contributions

    there are a lot of self employed people out here bullsh****ng

    in the near future I would hate to have an eighty year old breaking into my house looking for loose change

  10. Coffee says:

    I only ever invest in … Coffee !

  11. Sleepin dawg says:

    Straight up…you do not attach to pre existing investment…the use of retro active legislation is and was…forever will be unlawful!By doing so you enter…interject into a two part agreement…govt. or not….this is unlawful.

  12. Bermuda Boy says:

    Terry, can’t wait until you and Flip Flop start the new third world order. The slogan should be JUMP SHIP NOW BECAUSE, nothing else, just that!