Major changes must be made to fix the unsustainable Government pension system, according to an economist.

Economist Robert Stewart said the SAGE Commission Report clearly highlights that difficult decisions must be made to fix the massively underfunded programme.

The Report said the Government employees and MPs pension schemes are almost $1 billion short, while the national contributory pension scheme was $2 billion underfunded two years ago.

“There are a whole bunch of people in their 50s or early 60s who are expecting to collect a pension for the next 25 years or so, but it’s just not going to happen,” Mr Stewart said. “If you take out the generation like myself who are in their 60s and 70s or older and those under 20, there’s a small group between 20 and 60 years old who are expected to pay for everything, for everybody, and it’s not going to happen. Nobody can do that.

“For the average person, that’s like eight years’s salary. And that’s not including medical costs.”

He said that previous administrations had constantly ignored the issue, saying: “It appears they just hoped it would all work out, and it didn’t happen.

“The next step, I think, will be a whole lot of soul searching and a lot of speeches. I really hope something will be done but the past record of the Bermuda Government in dealing with difficult situations is not good.

“There is no choice. There is no money. The till is empty. When you open the safe to get the cash, there’s nothing in it. There are going to be a whole raft of disappointed people who are not going to collect what they thought they would collect. The great pensions they were promised, they aren’t going to get them.”

Regarding the recommendations of the report, Mr Stewart called for the end of the post office saying the service costs taxpayers millions while providing little benefit to the public. Other Departments that he suggested could be removed or receive major cuts include the Office of the Rent Commissioner and the Sustainable Development Department.

“The Rent Commissioner is not needed anymore. The problem isn’t people are paying to much rent, the problem is landlords are not getting enough rent to maintain their properties. Just look around the Island and you can see it,” he said.

“The Sustainable Development Department has been around for ten years and it hasn’t produced anything that is really worthwhile.”

Asked if he felt that the job losses caused by the closures would hurt the overall economy, he said: “You cannot pay people to do nothing and say it makes economic sense. It doesn’t. Even a five-year-old would be able to work that out.

“I just hope the Government has the good sense to follow the recommendations and actually do something, but given the wonderful record of the Bermuda Government over the last 20 or 30 years, one has a reasonable expectation that, as with all the other reports of the last few decades, it will gather dust somewhere on a Government shelf.”

Speaking in the House of Assembly on Friday, Finance Minister Bob Richards said the recommendations of the SAGE Commission Report are important for the Government, but added: “The likelihood of us following all of them slavishly are zero.”