Pensions rise from January
Seniors are expected to see an increase in their pensions after MPs backed a rise in payments.
Legislators supported raising the amount by 1.4 per cent although Opposition members claimed the rate was “embarrassing”.
Curtis Dickinson, the Minister of Finance, presented the Contributory Pensions (Amendments of Benefits) Order 2018 to the House of Assembly on Friday.
He said: “This is a reflection of Government’s resolute and unwavering commitment to improve the quality of life of our senior citizens.
“You will recall in the Government’s 2017 election platform it was declared that this government would put our seniors first and institute annual cost of living increases for social insurance pensions that will be linked to the rate of inflation and can help lessen the hardships that too many of our seniors now endure.”
He said the Order was to increase pensions and other benefits under the Contributory Pensions Act 1970 by 1.4 per cent backdated to last August.
Mr Dickinson said that represented an additional cost of $2.3 million a year for the fund.
The House heard the basic contributory pension would rise from $1,049.68 to $1,064.37 a month, and the maximum paid out would increase from $1,531 to $1,545.62 a month.
Mr Dickinson said it was the twelfth pension increase by Progressive Labour Party governments since 1998.
Members heard the consumer price index found cost of living had increased by 1.4 per cent since the last rise
The minister said the increase in payments would normally be accompanied by a corresponding increase in contributions but this would be delayed until changes to Bermuda’s social insurance system — based on percentage of income — were laid out.
Mr Dickinson said: “Contributions were last increased in August 2018 by 4.2 per cent.
“Considering the relatively strong position of the fund, it is anticipated that the fund can withstand the one-year delay in contribution increases.
“However, it is critical that the increased contributions come into force in August 2019.”
MPs heard that at September 30, the fund’s assets stood at more than $1.9 billion, which was 11.7 times the annual value of benefits paid in 2017-18 — a “relatively high rate of funding”.
Patricia Gordon-Pamplin, the One Bermuda Alliance finance spokeswoman in the House, said: “This is the lowest pension increase that this government has afforded to our seniors, many of whom are struggling severely, since they came into office in 1998.”
She added: “At 1.4 per cent I would have been embarrassed to bring this to this honourable House.”
Ms Gordon-Pamplin said: “What it appears is that the minister and the Government are doing not much more than ticking the boxes.”
She predicted others would criticise the OBA for fewer pension payments during its term leading the country from 2012 to 2017 but claimed austerity measures needed at the time were significant.
Ms Gordon-Pamplin added: “If things are as wonderful as the PLP government would have us believe they are, they should be ashamed of themselves to come to seniors with a 1.4 per cent increase.”
Wayne Furbert, the Junior Minister of Finance, asked: “Are you trying to tell me that this Government, who’s made a commitment to the people of Bermuda, the seniors, that it will given an increase every year while they are the Government, is wrong?”
Michael Dunkley, an Opposition backbencher, said: “In reality 1.4 per cent is a very small increase.”
He added: “We need to make sure that we shore up our pension funds as much as we can and I will be interested to see how the Government will be doing it going forward.”
David Burt, the Premier, said: “We promised the people of this country that we would deliver pension increases in line with the cost of living.
“That is what we promised and that is what we deliver.”
A statement later released by the Government confirmed seniors can expect to see the increase in their payment next month.
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