Contributions and Benefits Order 1995.

Government Senator Lynda Milligan Whyte said the increase in pension benefits was intended to protect pensioners from the erosion of their pension benefits.

The legislation would affect two categories of people. Those presently entitled to pensions and those who are making contributions.

She said the Minister had the power to revise the fund's contributions and benefits. The changes to the contributions would take effect on August 7, 1995 while that affecting benefits takes effect on August 16, 1995.

Sen. Milligan Whyte said there were seven types of benefits which included old age pensions, old age gratuities, widow/widower allowances and widow/widower gratuities.

Contributory benefits would increase by 2.2 per cent with incremental increases of 2.4 per cent.

Meantime non-contributory benefits would also increase by 2.2 per cent.

Sen. Milligan Whyte said actuaries reviewed the increases who compared the contributions to the increases in inflation to make sure that a balance could be struck at the end of the century.

Opposition Senator Terry Lister meanwhile, said he was concerned that the Government report was five years out of date and the auditor had refrained from offering an opinion on it.

"For a Government auditor to fail to give an opinion on the pension fund is serious,'' he charged.

Sen. Lister said he was generally supportive of the increases but he had some reservations given the auditor's misgivings.

"The people may be paying into a plan only to have it disappear into nothing.'' Likewise, Opposition Senate leader Senator Milton Scott said it would have been better had Government produced an up to date report so that the Upper House debate could have proceeded on a more informed basis.

Independent Senator Dr. Norma Astwood said the changes in birthrate could have an adverse affect on the pension scheme in the long run because there are fewer people being born and contributing to the scheme.

Moreover she said there were those young persons who did not have the computer and other technological skills that are required in the job market and would need to be trained or retrained.

Sen. Astwood said she wanted to know what Government was doing to address those young persons who were unemployed and not contributing to the pension scheme yet they received a pension at age 65.

Furthermore Sen. Astwood said there were older persons who were forced to retire even though they had the ability to continue to work.

Government Senate leader the Hon. Gerald Simons said that the Ministry of Education and the Ministry of Labour and Home Affairs were responsible for ensuring that young Bermudians received the necessary training and retraining.

He said the early retirement of the more senior civil servants was justified in many instances because they have more generous pensions and it also served to give younger people with career aspirations, room to move up.

Sen. Simons said that forced retirement did not happen often in Bermuda. In fact he said Bermuda had a high labour force participation rate for people between 16-85 years of age.

He said the pension scheme allowed the money that is paid in by the present work force to pay for the current retired population.

Sen. Simons said Government was concerned that the population was aging and that there were less workers supporting more elderly people.

He said the Minister of Finance, the Hon. David Saul, was fully aware of the problem.

Sen. Simons said there was no problem with the fund meeting its obligations and he acknowledged that it was late and said there would be steps taken to address this for next time.

He said a chartered accountant had been hired to help with the administration and a new computer system had been installed.

The order was then approved.