Bermuda’s National Pension Scheme requires fine-tuning, independent MP Terry Lister told Parliament.

Pointing out that when the scheme was implemented in 2000, “we were not all at the same place”, the Sandys South MP said in Friday’s House of Assembly: “The National Pension Scheme, to date, is worth differing amounts to different people.”

Mr Lister suggested Finance Minister Bob Richards consider allowing people to take out a lump sum, up to 25 percent of their pension assets upon retirement, to take care of major bills such as mortgages.

In the early stages of drafting the 1998 Act, Mr Lister said that option had been part of the plan.

“Somewhere along the way this idea was either withdrawn or just fell through the cracks, and that idea did not make it into the Act,” he said. “The time has come for this to be looked at so that those Plan members can manage their financial affairs, and not be penalised at retirement.”

Mr Lister challenged the Minister: “Why not do this?”

In a second suggestion for pension scheme reform, Mr Lister identified another area where lump sum withdrawals could be better than monthly payments.

“For some people, when they reach retirement age, the amount in their pension is so small that it doesn’t make sense to go on with a monthly amount,” Mr Lister said. “Some people receive as little as $200 a month.

He said recipients in these cases would be better off having the option of taking the full amount, to handle pressing expenses.

However, Mr Lister took aim at one cash withdrawal option that he said had been put into the bill as “a sweetener to make it more palatable to people”.

He asked Mr Richards to consider not allowing pension holders to cash out their small pensions when they transferred from one job to another.

The provision currently exists in cases where an employee has held a job for less than two years.

Mr Lister pointed out that in such cases, many people blew that money on frivolous items.

“Time has shown that this is money that never gets put back into the individual’s pension plan,” Mr Lister said. “This is a short-term cash bonanza, but long-term it is not beneficial to the individual come retirement.”

He added: “A lot of people just have a cruise with that money.”