Vulnerable Bermudians will carry less of the burden of sustaining the pension system under a “more progressive system” to be introduced next year.

David Burt, the Premier, said the Bermuda Government will begin to move away from a flat rate as part of its plan to create a fairer tax system.

It comes after Government announced people would face a 4.2 per cent increase in social insurance contributions from August 1.

Mr Burt noted seniors received a pension benefits increase of 1.7 per cent last December, backdated to the previous August.

He said: “To maintain the long-term viability of the Social Insurance Plan, whenever benefits are increased, contributions are increased as well.

“However in 2017 the Ministry of Finance was sensitive to the fact that contribution rates had already been set by employers for the current fiscal year, therefore, the increase in contributions was delayed until August 2018.

“Government will keep our pledge to our seniors by ensuring their pension benefits keep up with the increase in Bermuda’s cost of living.

“Next year, in conjunction with our pledge to create a fairer tax system, Government will begin the process to change pension contributions from a flat rate to a more progressive system ensuring that our most vulnerable Bermudians will carry a lower share of the burden of sustaining our pension system.”

The current combined rate per week for both employer and employee is $68.94 or $34.47 each. From August 1, this will be increased to a combined rate of $71.84 or $35.92 each.