contributions and benefits.

And while the increase in contributions is slightly more than the increase in benefits, Finance Minister the Hon. David Saul said this was being done to ensure that an adequate balance between pension benefits and contributions will exist in the next century.

The bill, the Contributory Pensions (Amendment of Contributions and Benefits) Order 1992, calls for contributions to be raised by 8.7 percent and benefits by 7.3 percent.

Dr. Saul explained that the bill was a continuation of Government's efforts to increase pension benefits by nine percent more than the inflation rate, in order to ensure a substantial pension scheme.

Although this was to be the seventh and final year for Government to implement that nine percent scheme, Dr. Saul said due to the state of the economy "Government thought it would not be in anyone's interest to raise this this year''.

Instead, he said, Government will phase it in at 4.5 percent plus the rate of inflation over this year and the next.

"This is being done on the advice of the UK actuary as in his 1987 report,'' Dr. Saul said. "The aim is to ensure there is a balance between contribution and benefits in next century.'' Dr. Saul said as a result of the bill, old age pensions will rise to $131.63.

He said with the growing elderly population, Government is examining the entire contributory pension scheme with the aim of strengthening it.

Opposition Leader Mr. Frederick Wade said while the Progressive Labour Party agrees that the scheme needs to be strengthened to ensure the elderly are adequately taken care of, private companies must also have a pension scheme.

"Government will have a difficult time to be able to meet the needs of our senior citizens this way,'' Mr. Wade said. "We must ensure that employers at least have a minimum scheme in place to accommodate employees once they reach retirement age.

"We have a duty as a country to make sure that our senior citizens are adequately taken care of. After seven years getting it (Government pension) up to $131, that's progress, but not as much as we will need in the next century.'' Mr. Wade asked how much money is collected from people who receive pensions while still employed.

National Liberal Party Leader Mr. Gilbert Darrell also agreed that Government's scheme should be strengthened and there is a need for private investment.

Mr. Darrell questioned asked: "When are we going to run out of the non-contributory pension?'' The Hon. Leonard Gibbons (UBP) praised Government for the steady increase in pension benefits over the years.

Referring to payment by people who are working, he said: "We all have to pay the piper''.

However, he agreed that the private sector must be encouraged to implement pension plans.

He said non-contributory pensions will always exist because there will always be people who are unemployed and do not pay pension.

Mr. Eugene Blakeney (PLP) asked whether Government is considering introducing compulsory pension schemes.

"The amount I believe, if these persons (the elderly) were on their own with no other income, they would starve in this country,'' he said. "I hope thought will be given to better payments to these people.

Mr. Ernest DeCouto (UBP) said pension schemes should be on a contributory basis.

He said those who do not put into the scheme, cannot have a voice on how it is managed.

"People in this community have been motivated by incentive to make money -- they should also be saving money.

He said if people put away for a rainy day while they are working, they will have financial reserves when they retire.

Shadow Social Services Minister Mr. Nelson Bascome (PLP) said some people are not fortunate enough to be able to build up their savings because they have just enough money to put food on their table.

He said provisions should be made for those families, particularly the surviving family of those who have contributed to the scheme and died before they could enjoy it.

He said the decreasing life expectancy, particularly of black and white males, should also be taken into consideration.

Noting that one third of Bermuda's elderly population live in poverty, Mr.

Bascome said Government should also look into the rising medical cost for the elderly and employers' abuse of the pension scheme.

The Hon. John Stubbs (UBP) agreed that the elderly have problems with medical costs and other things, but he said Government has made adequate provision for this by subsidising up to 80 percent of the hospital in-patient and out-patient care for those in need.

"We have here in Bermuda a marvellous social service net,'' he said. "But we should encourage people to look after themselves and start at a very early age preparing their own pension fund.'' However Mr. Stanley Morton (PLP) said some people "start off on the wrong foot and have not been able to catch up''.

"It is the responsibility of Government to ensure that all of its people are being taken care of,'' he said.

And while admitting Government has done a good job with the pension scheme, he suggested that it encourage wealthy pensioners to return their pensions to the scheme.

"I don't know to what extent the cumulative amount will be, but it certainly is a concept that is worth pursuing,'' he said.

Mr. Stanley Lowe (PLP) questioned why some who are due to receive pensions do not "for one reason or another''.

Dr. Saul said if any MP finds that those eligible in their constituency are not receiving pensions, they should contact him.

He said under the law no one over 65 years pays into the contributory pension fund.

However, he explained, the employer who has an employee over 65 years must pay his half of the contributory pension. And self-employed persons over 65 years must pay half.

He said Government does not expect to every run out of non-contributory pensions because it will always be required as long as there are people who miss payments or do not make a full contribution.

He said "individuals at the top of the social strata'' who are over 65 often do not collect their pensions and should be commended.

Hon. David Saul (no caption).