Access Portion Of Pension To Purchase Home
“This new initiative will allow individuals to access a portion of their pension savings to assist in the purchase of their first home,” Junior Minister of Finance Jache Adams said.
Speaking in the House of Assembly, Mr Adams said, “A key feature of this initiative is that the individual can use the refund not only for their own first home but also can use the refund towards a home for their children or spouse. This means a parent who may not have sufficient cash flow can still assist their child in purchasing their first home. Imagine the possibilities this creates: a family coming together to ensure the next generation secures their place in the Bermuda housing market.
“This is not like the pension withdrawals that were made available during the Pandemic, given the urgent nature, at that time, there were limited controls on where and how those funds were spent. However, with this initiative, the applicants have the option to use a portion of the funds from where they are currently invested to now invest in their first home.
“I must emphasise that this initiative will not be available to individuals on defined benefit pension plans, such as public officers. Let me be clear, the government did not decide to exclude public officers, however the very nature of defined benefit plans simply does not allow for such withdrawals. These plans provide fixed payments upon retirement and are structured in such a way that the benefits are predetermined and guaranteed. Any deviation, such as a one-time refund, would undermine the stability of these plans and potentially affect the long-term security they are designed to offer.
“It must also be highlighted that this option is completely voluntary as individuals are more than welcome to keep their pensions as they are. However, for those that choose to take up this opportunity the Ministry is currently working with the Pension Commission to ensure each are making an informed decision.
“Later today I will be tabling the National Pension Scheme [Occupational Pension] Amendment Act 2024 [PDF] and so I would like to end by emphasizing that together, we are stronger, and together, we are building a nation of owners.”
The Minister’s full statement follows below:
Mr. Speaker, I rise this morning, in this Honorable House, pleased to announce an exciting and forward-thinking initiative that fulfils a promise from the PLP’s 2020 election platform and continues our path towards building a nation of owners.
Mr. Speaker, Homeownership is not just a cornerstone of personal financial security, but a foundational element of strong, stable communities and a resilient economy. Today, I am pleased to share the details of a new measure that expands the scope of the National Pension Scheme Act with the aim of helping many Bermudians towards the dream of homeownership.
Mr. Speaker, For many, the path to purchasing a first home can feel out of reach, with the difficulty of meeting the down payment requirement often identified as a major barrier. Our government recognizes these challenges, and we are taking action to empower Bermudians by giving them greater flexibility with their pension savings. Simply put, this new initiative will allow individuals to access a portion of their pension savings to assist in the purchase of their first home.
Mr. Speaker, A key feature of this initiative is that the individual can use the refund not only for their own first home but also can use the refund towards a home for their children or spouse. This means a parent who may not have sufficient cash flow can still assist their child in purchasing their first home. Imagine the possibilities this creates: a family coming together to ensure the next generation secures their place in the Bermuda housing market.
Mr. Speaker, I am reminded of a story shared to me by a constituent—a single mother of two. Her daughter recently completed her studies and secured her first job and was eager to step onto the property ladder but was short of the necessary down payment. While the mother had always wanted to help, her own financial situation made it impossible to provide the cash her daughter needed. With this new initiative, that mother now has a way forward. She can support her daughter’s dream of homeownership by accessing her pension, while her daughter can contribute a portion of her own pension savings as well. Together, they can secure a home, together they can investment not just in property but in their family’s future.
Mr. Speaker, This is not like the pension withdrawals that were made available during the Pandemic, given the urgent nature, at that time, there were limited controls on where and how those funds were spent. However, with this initiative, the applicants have the option to use a portion of the funds from where they are currently invested to now invest in their first home.
Mr. Speaker, I must also address a question that may be on the minds of some. I must emphasise that this initiative will not be available to individuals on defined benefit pension plans, such as public officers. Let me be clear, the government did not decide to exclude public officers, however the very nature of defined benefit plans simply does not allow for such withdrawals. These plans provide fixed payments upon retirement and are structured in such a way that the benefits are predetermined and guaranteed. Any deviation, such as a one-time refund, would undermine the stability of these plans and potentially affect the long-term security they are designed to offer.
But Mr. Speaker, For all other eligible Bermudians, this initiative opens the door to new opportunities. It provides a hand up, a chance to overcome the financial barriers that have kept too many out of the housing market for too long. It is a tangible, meaningful way to deliver on our promise of a nation of owners.
Mr. Speaker, This initiative is not just about giving people access to their pension funds—it is about giving people access to their future. It is about equipping families with the means to achieve one of the most important financial milestones: homeownership.
I am confident that this initiative will be met with enthusiasm and appreciation by many Bermudians who understand the importance of homeownership, and I look forward to seeing how it transforms lives across our country.
Mr. Speaker, It must also be highlighted that this option is completely voluntary as individuals are more than welcome to keep their pensions as they are. However, for those that choose to take up this opportunity the Ministry is currently working with the Pension Commission to ensure each are making an informed decision.
Mr. Speaker, Later today I will be tabling the National Pension Scheme [Occupational Pension] Amendment Act 2024 and so I would like to end by emphasizing that together, we are stronger, and together, we are building a nation of owners.
Thank you.
Can’t think of a much worse thing being recommended. Not much difference in borrowing 130% of the home value. Clearly the junior minister is not very financially literate, scary that he has some input into Bermuda’s finances but then he is learning from the current minister of finance.
Yup. Song says bring them in, bring them in….voters beware…Wolves, foxes, lions and bears..
Amazing. How stupid and harmful can their ideas and actions get before people realize they are not good for them?
This is discriminating based on age. Either the opportunity is open to everyone of adult age or not.
Human rights are being violated with this law.
I can’t think of anything worst that will set our people even further backwards. It really is election time… it’s all giving “desperate”
Or how about getting the banks to reduce their lending interest rates from 10% ???
Another policy that will see people raid their future financial well being for immediate gratification.
So you get fooled into making a deal with the banks to get a mortgage by accessing your pension. If you are struggling now to save , try owning a home you have to have insurance for , maintenance , etc. and if you don’t pay the banks take it all away. I don’t think they know the stress they are setting people up for. Oh don’t forget the fluctuating interest rates when the federal reserve make adjustments. It’s way more to owning a house than a down payment.
THIS government many years ago forced the issue of a private pension. Why because it is no secret that the government pension might not be enough or won’t even be a thing in a few decades. So why would this same government keep allowing people to dip into the one revenue source that the y can count on during their retirement? This government allowed people to dip into their pensions 2 times I believe and now this.
Mr. Adams, I know you are trying to be popular and build up support, but do you not have a conscious?
If a person MUST dip into their pension to be able to buy a house, that should be a red flag for that person or couple and reason to NOT purchase. On top of that you are going to allow seniors to be put in the difficult position where they can dip into their pensions to “assist” their children to buy a home? You are supposed to be protecting our seniors not opening another door towards elder abuse and family drama? Let’s assume a parent has 2+ children, can they only help the first that asks? Or will you allow each child to take a little bit until it’s all gone? I don’t understand this entitlement of some people. IF YOU ARE AN ADULT YOU SHOULDNT BE ASK MOMMY & DADDY FOR HELP BUYING A HOUSE!
As I said above, another policy that will see people raid their future financial well being for immediate gratification.
A very good approach to the “owning piece of the rock” I came up with a better idea some years ago that wouldn’t hinder anyone’s pension. I suggested a database where landlords and tenants are kept in, after a period of time around 8-10 years, the renter could present that data to a bank and obtain a mortgage. It’s a longer route but it will stimulate the rental market and keep the money circulating amongst homeowners and renters. So one is helping the other in the long run.