Phased Approach to PSSF Pension Lump-Sum
The Government announced a “phased approach to changes in the lump-sum conversion factor alongside a cash protection guarantee under the Public Service Superannuation Fund [PSSF], reducing the immediate impact on public officers who are employed and eligible for retirement on March 31 2027.”
A Government spokesperson said, “The PSSF reforms provide for the lump-sum conversion factor to be adjusted following actuarial review and consultation with the Public Service Superannuation Board. Under the revised approach, future changes will be phased in over time. This change will have no impact on members who choose to receive their full pension without taking a lump sum.”
David Burt, Premier and Minister of Finance, said: “We listened carefully to the concerns raised by public officers and their representatives about the impact of an immediate change to the lump-sum conversion factor for those wishing to reduce their ongoing pension payments in exchange for a lump-sum.
“This phased approach provides a gradual transition for those approaching retirement, while maintaining our responsibility to strengthen the PSSF and ensure that it can continue to provide secure pensions for public officers now and in the future.”
The spokesperson said, “The lump-sum conversion factor is the number used to calculate the amount of money a member receives upfront when they choose to exchange part of their lifelong ongoing pension income for a one-off lump sum. A higher conversion factor produces a larger lump sum for the same amount of pension exchanged, while a lower conversion factor produces a smaller lump sum.
“A member who chooses to receive a lump sum, exchanges part of their annual pension for that upfront payment and will therefore receive a smaller ongoing pension than if they had chosen to receive their full pension.
“The cash protection guarantee applies to public officers who are employed and eligible to retire on 31 March 2027. For these officers, the cash value of the lump sum they could have received on that date will establish a minimum protected amount if they choose to remain in service.
“If they continue working their eventual lump-sum payment will be no less than that protected amount, regardless of what the applicable conversion factor may be when they retire. If their eventual calculation is higher, they will receive the higher amount.
“The guarantee protects the cash amount available on 31 March 2027; it does not guarantee that the 11.5 conversion factor will continue to apply in future years. The protection will remain in place until the officer eventually retires.
“For more information on the Public Service Superannuation Fund reforms, visit: https://www.gov.bm/pssf.”
