A leading pension provider yesterday raised serious questions about the Housing Corporation's plans to borrow money at below market rates to subsidise affordable housing.

Incoming BHC chairman Wentworth Christopher said the Corporation is hoping all pension providers -- Government and the private sector -- will buy BHC bonds at four percent interest. The market rate is nine percent.

Mr. Christopher said he hoped pension providers would be "good corporate citizens'' to help BHC provide affordable mortgages for low income families.

But Gerald Simons, the president and chief executive of leading pension provider, the Argus Group, said yesterday: "Is it fair for a person who is working to have their long-term retirement income reduced in order to provide housing for someone?'' And Shadow Finance Minister Grant Gibbons warned it would be "dangerous'' for Government to "cream off'' money from the contributory pension scheme -- which everyone pays into -- to buy the bonds to prop up BHC plans.

Mr. Simons added: "If you take pension money and give them four percent you are asking people to forgo some of their retirement income in order to subsidise housing, and that raises several issues.

"Four percent in some cases would not be sufficient in some cases to support some policies and would not be a suitable investment.

"There is no simple way to provide housing. I have heard about this but not seen any specific proposals.

"We would look at it but I can't say whether we would participate or not.'' Mr. Christopher told The Royal Gazette that BHC will approach the Pension Commissioners, who regulate pension providers, to see if they can "encourage'' companies and Government to take out the bonds later this year.

He said: "It is a community burden and it should not just fall on a few shoulders, it should be more widely dispersed. At this stage it is a concept, but we will be talking to the Pension Commissioners to see if they are in broad support of the concept.

"Our hope is that if they concur, the Pension Commissioners can encourage the pension providers to make a small percentage of their funds available for the common good by having these funds made available to the Housing Corporation and secured by the Housing Corporation at attractive interest rates -- four percent.

Gibbons: Pensions for homes `dangerous' "We are not looking to hold that money in perpetuity, and one of the suggested periods was five years.

"It is a question of being good corporate ccitizens. What is the effect of the absence of these funds? There would be tremendous social pressures exerted.

"It would impact on the stability of family life and the stability of life in this society at large.'' Asked if the Pension Commissioners could convince companies to take out the bonds, he said: "I would prefer to say the Pension Commissioners can encourage the providers to give consideration to these proposals.

"We do not need the funds at this point in time but we wish to create the framework when these funds are required they will be available at below market rates.'' Mr. Christopher hinted Government use of pension funds to buy the bonds would be essential for the scheme to succeed.

He said: "If it is to be feasible there has got to be Government buy-in.'' Dr. Gibbons said: "Government collects contributions on behalf of employees and employers and it is Government responsibility to invest that to get a maximum rate of return. It is a pay as you go scheme and contributions are used to pay Bermudians who are already retired.

"The pension is for retirement and it is dangerous to cream it off to support another project that should be dealt with separately as a Government policy matter using tax revenue, not use money which Government does not own but administers on behalf of others.''