Column: MP Jache Adams On Pensions & More

[Opinion column written by MP Jache Adams]

Last Friday, during the sitting of the House of Assembly, the Government proudly unveiled a new initiative that will have a significant positive impact on the people of Bermuda.

Starting April 1st, 2025, Bermudians will see administration fees applied to Private Pensions slashed, and the introduction of measures to prevent future increases.

Why is this important?

Every dollar in your private pension represents your hard work and dedication, and we believe it should be protected. With an ageing population and longer life expectancies, we must take steps to secure the financial future of our workers when they enter their golden years.

Under current regulations there are no limits on the amount plan administrators can charge for managing pension plans. Following a comprehensive review by the Pension Commission and a leading Canadian pension consultancy firm, it became clear that there is significant variability in the fees paid by plan members with many paying well above international standards.

Recognizing the impact of high fees on the final pension balances of Bermudians, this Government recognized that changes had to be made.

Effective April 2025, we will implement caps on pension plan administration fees. For those in group retirement plans, the fees will be limited to:

• 1.25% per year for balances over $50,000
• 0.75% per year for balances between $25,000 and $50,000
• 0.5% per year for balances under $25,000

Similarly, for individual local retirement plans, the fees will be capped at:

• 1% per year for balances over $50,000
• 0.75% per year for balances between $25,000 and $50,000
• 0.5% per year for balances under $25,000

I’m sure many are asking “what does this mean for me”?

For individuals with pension balances over $50,000, the average annual savings will be $725, potentially adding up to over $75,000 in additional retirement funds over a forty-year career. For those with smaller balances, the average annual savings will be $125, totaling over $14,000 over the same period. These changes ensure that more of your hard-earned money stays with you during your retirement, for your use and benefit.

In addition to capping fees, we are requiring pension plan administrators to include lower-cost investment options, so that a broader spectrum of options can be provided, and prohibiting the administrators from receiving advisory fees on any investment funds offered to plan members.

Safeguarding the financial well-being of our people and protecting the dignity of our seniors are high priorities for your PLP government. By limiting the fees deducted from your pension funds, we are making sure your savings are maximised for your future benefit. This initiative demonstrates our commitment to ensuring Bermudians have a secure and dignified journey through their retirement years.

- MP Jache Adams, Constituency 19 – Pembroke West

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