Pensioners are having to take jobs in retirement because of shortfalls in pay-outs following a change in management of the hospital pension fund, says a union leader.

The Pension Commission have launched an investigation after the Bermuda Public Services Union voiced fears about excessive rake-offs from the $40 million fund which covers more than 1,000 workers.

It?s feared $800,000 of commission fees, performance fees and management fees were being charged by third parties while the slow growth rates shocked members.

Bermuda Public Services Union leader Edward Ball said his union had been kept in the dark about the decision, taken in 2000 by the board headed by chairman Raymonde Dill, to switch from a defined benefit plan to a defined contribution plan.

He said with the first there was a guarantee of a fixed income irrespective of what the stock market did, which put the onus on employers making sure the fund was viable, while with the second employees pick investment options and leave it to market forces to decide the final pay out.

?Persons have lost money and are working to make it up. They have compared what they thought they would get to what they received,? said Mr. Ball.

?They have put in for 20, 30, 40 and 50 years only to find out it?s entirely different.

Mr. Ball said the defined contribution plan was cheaper for the employer because they share the risk with the employee.

At the same time the change was made investment and administration was separated said Mr. Ball and both arms put out to tender but the union had not been informed until it was too late. ?If the union had been involved we would have exhausted all the possibilities, not go that way to protect the people inside the scheme.?

He said across North America and the Caribbean unions were taking a more active role in monitoring pension funds because of fears over their viability.

And he said his union would be keeping a close eye on other pensions schemes held by members in other sectors.

Yesterday The Pension Commission confirmed that fund administrators Emerald Financial who took over the hospitals pensions fund did not register it.

Pension Commission head Peter Sousa said registration meant the commission had reviewed the pension scheme and its documentation and that it complied with the stipulations of the act. But Mr. Sousa said irrespective of whether the fund was registered it still had to comply with the law.

?It doesn?t take away from the ongoing responsibilities of the scheme. People put too much on whether it is registered.?

Mr. Sousa said the Commission probe into the Hospitals Pension fund could take months but so far there had been full co-operation had been given by the hospital board and trustees, although he could not go into details of the concerns.

But he has yet to speak to administrators Emerald Financial Group.

He said he did not know whether Emerald took over the plan before the act came into force. It required employers to set up a pension plan for eligible employees if one had not already been set up. The hospital plan had been set up years before that said Mr. Sousa.