Dear Sir,

I write to express my objection to the restrictive application of the 401(k) pension exemption under the National Pension Scheme (Occupational Pensions) Act.

As a dual Bermuda and United States citizen employed in Bermuda, I am denied the ability to use a US tax-qualified 401(k) plan to satisfy mandatory pension requirements— an option expressly available to US citizens who hold Bermuda work permits.

I support the purpose of the National Pension Scheme. However, the current framework creates an unfair and costly double standard for dual citizens. By treating me only as Bermudian for pension purposes, the Act ignores unavoidable US tax obligations and causes real financial harm:

Punitive double taxation: the IRS does not treat Bermuda occupational pensions as qualified tax-deferred plans. Mandatory employee and employer contributions are taxed currently by the United States, and investment growth may also be taxed before retirement. Because the funds are locked, any resulting tax must be paid out of pocket.

Reduced retirement security: denying access to a qualifying 401(k) prevents dual citizens from building retirement savings in a recognised, regulated US tax-qualified plan, even where an employer can support that option.

Unequal treatment: the Act protects work permit holders who are US citizens by allowing the 401(k) exemption, but withholds the same protection from Bermudians who face the same US tax exposure.

The result is indefensible: two US taxpayers in Bermuda are treated differently solely because one has a work permit and the other is Bermudian. That distinction does not protect Bermudians; it penalises them.

I urge the Pension Commission and the Ministry of Finance to amend the exemption so it is based on US tax and regulatory exposure, not immigration status. Dual citizens should not be financially punished for being Bermudian.

CARRIE L. ROSOREA

Smith’s