Ministry Clarifies Pension Increase Suspension
A spokesperson for the Ministry of Finance has advised that the Pensions [Increase] Amendment and Suspension Act 2014 bill recently tabled in the House of Assembly “does not pertain to social insurance pensions, i.e. the Contributory Pension Fund. Only pensions with respect to the Public Service Superannuation Fund and the Ministers and Members of the Legislature Pension Fund will be affected.”
The Pensions [Increase] Amendment & Suspension Bill 2014 can be read in full below [PDF here]:
OK, great. Now what does that mean?
Exactly! The Ministry of Finance have the responsibility of working with the Minster to ensure that not only is the correct information being send out but that it’s sent out in a way that the average person understands. This is not about making the Ministry of Finance sound important and financially sophisticated but that the average person on the street can understand. SMH
Here is the man on the street translation. Previously the legislation said that the Government employee pension funds (not the regular social insurance fund that every employee (non Gov. and Gov.)in Bermuda pays into) had to be topped up (additional cash added) for any increases to the annual cost of living index. This new change in legislation mean this can be suspended by the Minister in the event the country has no $.
This is strictly a funding issue and will NOT affect what pensioners (both former Gov. employees and non Gov. employees) will receive each month. However! as the country’s pension funds (Gov. and non Gov. employee funds)are underfunded by almost $2B the $ will run out. No question. Therefore unless further adjustments are made to both the Gov. and on Gov. employee pension plans, if you’re something like mid 40′s or something, there will be NO money left to pay you any pension.
So all this “granny’s pension just got cut this month” in nothing more that scaremongering by the politicians to garner votes. The facts are: 1) if changes aren’t made to Bermuda’s pension plans (changing the retirement age, reducing the benefit payments, changing to defined contribution)the will be NO money left for anyone currently in their mid-40s or younger and 2) the funding issue was made worse when the PLP suspended funding on the pension plans for a year
This issue is a problem for all of us and is a much much bigger problem than we realize or than any politician wants to acknowledge publically so as to not scare off voters.
Fahy – you need to slow down – your starting to mess with people who so desperately rely on the Pensions to
survive.— your plan is going to have long lasting effects right up to the next election. — you run the risk of self destruction.
This is not popular with 65% of the voting public. — I just got an uneasy feeling that some of your decisions will leed to a
popular uprising. —- slow down