Many of Bermuda?s seniors are living on less per year than some people pay per month in rent, Opposition Leader Grant Gibbons warned yesterday.

Half of older seniors and a quarter of younger seniors live on under $12,000 a year and in Bermuda that falls far below subsistence level, he said.

?Without an overall plan to address the plight of the elderly on a structural basis, the PLP Government will once again be spending money to address the symptoms without addressing the cause,? Dr. Gibbons charged.

After the 9 percent pension increase in 2004 and the 3.5 percent increase in August this year, the maximum benefit of just over $1,000 a month and basic contributory pension of $767.43 are not going far enough for our seniors, he said.

Dr. Gibbons said no serious thought has been given to the structural issue of adequate pensions and how to finance them.

He said the increase in the rate of life expectancy means the length of time that people receive benefits has been extended, putting additional strain on the system.

With 43 percent of seniors depending on their contributory pensions as their primary source of income, Dr. Gibbons said a quarter of Bermuda?s younger seniors and half of the older seniors live below the poverty line.

Dr. Gibbons said even with last month?s pension increase of 3.5 percent, the rate of inflation was at almost 4 percent and seniors are still lagging behind in regard to covering their expenses such as electricity, fuel and HIP premiums ? which also rise in price annually.

And the rate of increase in social insurance benefits has continued to fall significantly behind the average increase in wages in Bermuda, he added.

Meanwhile, the nine percent increase in 2004 was given out ?without a corresponding increase in contributions? something which is not good practice, he suggested.

In June this year, the Government suggested an integration of the National Pension Scheme and Contributory Pension Fund, but Finance Minister Paula Cox had indicated that this would have ?no clear tangible benefit? to pensioners.

Dr. Gibbons said he is still waiting for Government to explain the dynamics of how the social insurance scheme would work with the National Pension scheme. The National Pension scheme was established in 1998 and the benefits of this scheme are not available to those who retired before that date.

Dr. Gibbons said the current administration has failed to articulate a pension policy and has not addressed how the social-pension scheme should be structured to work in conjunction with the National Pension Plan.

He said current retirees and those about to retire, will not benefit from the National Pension Plan as much as those who remain in the workforce longer.

Dr. Gibbons said it is vital that an actuarial analysis be done to determine how the social-insurance scheme and the National Pension Scheme Plan might work in parallel over the next decade to improve the benefits of current retirees and strengthen the plans of future retirees.

The last Actuarial Review of the Pension Scheme was released to Government in July 2000. The purpose of this report was to facilitate decisions about future contribution and benefit increases and to allow informed political debate about the long-term sustainability of the scheme.

According to the report, prior to 1985, there was no established method for raising benefit levels.

For some years, it stated, after August 1985, benefit rates were increased each year by some 9 percent a year more than the rate of inflation.

The intention was that old-age pension would rise to $100 a week when expressed at 1985-86 prices, compared with the actual pension in 1985-86 of $54.75 a week.

Seven increases of 9 percent were needed to achieve this and the final 9 percent increase was spread over 1992 and 1993, so that the planned programme of additional increases was completed with effect from August 1993.

The study found that in order to maintain a balance of income over outflow for a longer period, contributions would need to increase at an even higher rate in excess of benefits.

This means, for example, that by the year 2033, in order to match the increased level of benefit outflow, contribution rates would need to be about two and half times their level in 1994 -1995.

This would require contribution rates to be increased at about two and half percent a year in excess of benefit increases over the 40-year period.

Dr. Gibbons said it was obvious back in the early 1990s that another pension scheme would be needed.

?This was why the UBP Government moved at the time to implement the separate national pension scheme to ensure that future employees would be able to retire with adequate pension benefits,? he said.

It was clear from the demographic issues, he said, that a social insurance scheme would not be able to do it without substantial increases.

The increases in the 1990s put a huge strain on businesses in Bermuda as contributions increased by between 10 and 11 percent, he added.

This was during a period when Bermuda experienced a recession in 1991-1993/94.

He said the current administration has made some efforts in addressing social insurance benefits, but they are still inadequate. ?They have to be looked at in a proper actuary analysis to see what can be done for our seniors.?