Government has paid out close to $3 million to people dipping into their pensions to pay for living expenses.A total of 530 applicants have benefited from the financial hardship scheme since it was enacted two years ago — hundreds more have expressed interest.Pension Commission head Peter Sousa said overdue rent, mortgage arrears and educational expenses are the main reasons cited by applicants.“Since the introduction of the financial hardship provisions in August 2010 up to the end of June 2012, the Commission has received a total of 530 hardship applications,” he said.“The total value of refunds approved is $2.9 million. The Commission is still receiving a steady flow of applications, with rental arrears representing the highest category.”He said that a total of 834 persons have met with Pension Commission staff because they were considering withdrawing funds.“In these meetings the application process is discussed and their various questions answered,” Mr Sousa said. “Like the private pension providers, the Commission emphasises to applicants the long-term implications of making such withdrawals and encourages them to make up any withdrawals if they are able to in the future.”The National Pension Scheme (Occupational Pensions) Amendment Act was described by Premier Paula Cox as an "onionised bailout for Main Street for those people in hardship" when it was put before Parliament in 2010.She said the maximum refund would be capped at 20 percent of the account balance on the application date, with each person limited to one application in a five-year period and two applications in their lifetime.Between August 2010 and December 2011, $2.1 million was paid out to 249 applicants looking to withdraw funds from private sector pensions. A total of 343 people applied to benefit from the scheme.Ms Cox said at the time that 108 of the successful applications were looking to fund educational expenses, 77 were made because the applicant faced the imminent threat of eviction from their rented home, 39 faced the imminent threat of losing their own home and 25 needed to pay for medical expenses.Said Lauren Bell of The Argus Group: “The economic downturn is continuing to take its toll with requests for financial hardship withdrawals from pension plans continuing at a steady rate. The majority of requests have been for educational purposes followed by requests for assistance with rental arrears.”Laurie Daniels said Colonial Pension Services Limited “has not seen an inordinate number of members seeking to access their pension funds” since the financial hardship withdrawal legislation came into effect.“Of the approved financial hardship withdrawals received by Colonial, 41 percent were for rental arrears, 20 percent for mortgage arrears, 32 percent for educational expenses, and seven percent for medical expenses,” she said.Added Miguel DaPonte of BF&M: “BF&M has continued to experience requests for hardship withdrawals but it is difficult to ascertain the overall impact of the requests due to several changing variables including membership numbers and changes in assets under management.”The insurance representatives stressed they “educate” their members “on the ramifications of early withdrawals”.“At Colonial, when the financial crisis hit in 2008, we reached out to our members to provide advice and guidance as we do on an ongoing basis,” said Ms Daniels. “We also educate our members on the benefit of contributing additional voluntary contributions to the pensions to add value and growth.“In March we held the first of our pension forums to speak to the general public about pensions and preparing for retirement. We believe that withdrawing from accumulated pension benefits before retirement as the legislation allows, provides a short-term solution leading to a long-term deficit.”She continued: “We certainly are not insensitive to the very real financial struggles that many in Bermuda are facing as a result of the prolonged recession, however we believe that accessing the pension now will likely lead to more difficulties for many people at retirement.”Ms Bell said that The Argus Group “recognises that these are tough times for Bermuda residents” but encourages policyholders “to think carefully before dipping into their pension pot as it will impact their lifelong retirement income”.“Based on research recently commissioned by Argus, almost 20 percent of those questioned are ‘not prepared at all’ for retirement. The research also showed that the vast majority of respondents (69 percent) are not making additional voluntary contributions to their pension plans,” she said.“Worryingly, five percent of those who hadn’t done so already, were considering applying to make a hardship withdrawal from their pension fund. If it is necessary for an individual facing hardship to draw upon their pension plan, we would recommend that they endeavour to repay those funds into the pension plan as soon as they are financially able in order to avoid jeopardising their future income.”