Benefits and contributions involving Government's Contributory Pension Fund are to go up.

Benefits are set to go up by three percent -- in line with inflation -- while contributions will rise by the same amount.

And Finance Minister Grant Gibbons said: "The actuary has said contributions have to increase in line with inflation and sometimes more than that because of the ageing population.'' He added that approximately 90 percent of all Bermudians under 65 could expect to get a pension when they reach 65.

And he said around 40 percent of the workforce contributed to a private pensions scheme as well.

Dr. Gibbons told the House of Assembly that Government would "supplement this Contributory Fund with a National Pension Scheme which we will be discussing very soon''.

He was speaking as he introduced the Contributory Pensions (Amendment of Contributions and Benefits) Order, which passed yesterday.

Shadow Finance Minister Eugene Cox said about 25 percent of Bermudians have adequate pensions.

Mr. Cox added: "There are still some seniors out there today who are in dire need of funds.

"If one thinks of these things and the cost of living today, it begs the question of when we are going to get an adequate pension plan in place because we certainly need it to be done post haste.'' Ottiwell Simmons (PLP) said the current maximum pension was $777 a month and it was vitally important to many people.

And he added: "If we were contributing according to our income, the fund would be massive.'' He said the fund now stood at around $533 million -- but that was based on a fixed contribution of $40 a week with the employer and the employee contributing -- and was not calculated on individual income.

"When you get a pension as a benefit, it's considered a deferred payment for the work you have been doing all your life,'' he said.

And he said the Country owed the working-class people who had contributed so much to the prosperity of Bermuda and should provide them with "a very generous and comfortable pension''.

Mr. Simmons added: "I don't think the sum of $777 does that or pays them for their contribution.'' Dr. Gibbons said by 2011, 12 percent of Bermuda's population will be over 65 years old.

"We are dealing with a moving target and that has to be factored into this as well,'' he said. "We have actually been blessed in Bermuda because our contributory pension fund is being well-managed.'' And he said some countries were seeing their state pension plans "disintegrate'' because of demand outstripping contributions.

But he added that Bermuda had "a much broader middle-class'' than the US and a smaller percentage in the `poor' category.

Dr. Gibbons said: "That is something we should be proud of and grateful for because we have been able to earn a higher median income than the US.'' But he added: "That is not to say we are not concerned about the incomes of our older citizens.''