Furbert On Public Service Superannuation Fund

“I rise today to advise the Honourable Members of the completion of the actuarial reviews of the Public Service Superannuation Fund [PSSF] and the Ministers and Members of the Legislature Pension Fund [MMLPF] for the year ended March 31, 2020,” Junior Minister of Finance Wayne Furbert said in the House of Assembly today [May 9].

Mr Furbert said, “I acknowledge that the 2023 Actuarial Reviews for both the Public Superannuation Fund and the Ministers & Members of the Legislature Pension Fund were tabled in this House on March 21st, 2025. It was at that time, inquiries regarding the 2020 actuarial reviews were made.

“Upon investigation, I became aware that the reports had not been tabled. Once this oversight was identified, the Ministry of Finance reviewed its records and found that although the actuarial reviews were completed in December 2020, they were never presented.”

The Junior Minister’s full statement follows below:

Mr. Speaker, I rise today to advise the Honourable Members of the completion of the actuarial reviews of the Public Service Superannuation Fund [PSSF] and the Ministers and Members of the Legislature Pension Fund [MMLPF] for the year ended March 31, 2020, which were tabled in this Honourable House today.

Mr. Speaker, I acknowledge that the 2023 Actuarial Reviews for both the Public Superannuation Fund and the Ministers & Members of the Legislature Pension Fund were tabled in this House on March 21st, 2025. It was at that time, inquiries regarding the 2020 actuarial reviews were made.

Upon investigation, I became aware that the reports had not been tabled. Once this oversight was identified, the Ministry of Finance reviewed its records and found that although the actuarial reviews were completed in December 2020, they were never presented.

Public Service Superannuation Fund

Mr. Speaker, the PSSF provides contributory defined pensions to Bermuda’s Public Service employees and to employees of some Public Authorities. The purpose of the actuarial review is to determine the going concern of the financial position of the PSSF, to estimate the costs of the benefits being accrued during the period up to the next valuation date and to determine the adequacy of the PSSF contribution rate. The report includes a three-year projection of the funded ratio based on assets, actuarial liabilities and normal cost projected to March 31, 2023.

Items of note regarding the actuarial review are as follows:

• The total invested assets of the Fund at March 31, 2020, was $559.4 million [March 31, 2017, $571.2 million.] This represents a $11.8 million or 2.06% decrease since the 2017 review.
• Contribution income for the year ended March 31, 2020, was $61.9 million [March 2017 - $59.8 million] and benefit payments and refunds totaled $86.2 million [March 2017 - $81.9 million].
• There were 4,476 active members contributing to the Fund as at March 2020 [March 2017 - 4,312] and 3,188 [March 2017 - 2,946] retirees who were receiving a benefit.
• The PSSF Act was amended in 2019 to change the compulsory retirement age from the age of 65 to 68 years for all employees except for the Police, Fire Officers, Prison Officers, Judges and Teachers.
• In response to the COVID-19 pandemic the Government enacted the Public Service Superannuation Temporary Amendment Act 2020, to provide a one-year suspension of government’s contributions and an optional suspension of contributors’ contribution.
• The PSSF is not fully funded on the going concern basis. As at March 31, 2020, the net fund assets were $609.74 million, and the accrued benefit obligation was $1.635 billion. The addition of the unamortized experience gain of $12.84 million gives the pension liability of $1.038 billion recorded and disclosed in March 31, 2020, audited statements of the Consolidated Fund.
• The three-year projected financial position to March 31, 2023, was done using the economic and demographic assumptions which were used for the March 2017 valuation, taking account of the one-year suspension. The funded ratio of the PSSF at March 31, 2020, was 37.3% and this is projected to decline to 30.3% at March 31, 2023. The funded ratio measures the actuarial value of the assets of the pension plan divided by the actuarial liabilities.

Ministers and Members of the Legislature Pension Fund

The MMLPF provides contributory defined pensions to all Ministers and Members of the Legislature of Bermuda. Benefits in respect of service before April 1, 1988 are paid from the Consolidated Fund. The purpose of the report on the actuarial review is to determine the going concern financial position of the MMLPF; to estimate the costs of the benefits being accrued under the MMLPF during the period up until the next valuation; to determine the adequacy of the MMLPF contribution rate and to estimate the future benefits payments under the Consolidated Fund of the Government of Bermuda. The report includes a three-year projection of the financial position of the MMLPF [excluding benefits covered by the Consolidated Fund] to March 31, 2023.

Items of note regarding the actuarial review are as follows:

• There were 48 active members contributing to the Fund as at March 2020 [March 2017 - 46 active members] and 59 [March 2017 - 56] retirees, spouses of retirees and other beneficiaries who were receiving a benefit.
• At March 31, 2020, the valuation date, the main assets of the MMLPF consist of an amount due from the Consolidated Fund of $11.06M [March 2017 - $12.75M].
• In response to the COVID-19 pandemic the Government enacted the Ministers and Members of the Legislature [Salaries and Pensions] Amendment Act 2020 to provide for a one-year suspension of the Government’s contributions and an optional one-year suspension of a member’s contribution.
• The MMLPF is not fully funded on the going concern basis. The members and Government contributions do not cover the normal costs of benefits earned each year under the MMLPF. The funding ratio at March 2020 was 36.7% and this was projected to decrease to 29.8% at March 2023.

Mr. Speaker, the benefit payments made from all the pension plans are important to the ongoing financial stability and security, along with the health of the seniors in our society.

Mr. Speaker, Honourable Members are advised that the March 31, 2023, next actuarial reviews of the PSSF and the MMLPF were tabled in the House of the Legislature on March 31, 2025, and the next actuarial review is scheduled for the period March 31, 2026, for the PSSF and MMLPF.

Mr. Speaker, as outlined in my 2024/25 and 2025/26 Budget Statements, the Government acknowledges the critical need for pension reform and has undertaken extensive analysis and consultation on this issue. After consulting with all relevant stakeholders, several recommendations have been agreed upon to address the increasing unfunded liability of the PSSF.

These recommendations will be presented in this House during the budget session, ensuring that commitments to current and future public service retirees can be honoured.

Thank you, Mr. Speaker.

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