Little known amendments to the Pensions Act were revealed by financial expert Patrice Horner to a meeting of Hamilton Rotarians yesterday.

Mrs. Horner, who is Vice President of Osprey Investments, reminded her audience that under the Act -- effective from January 1 -- payments were based on total compensation, including commission and bonuses.

She pointed out that there was a $200,000 ceiling on annual pensions earnings, bonuses were only pensionable when over 10 percent of the salary, gratuities are still excluded from the pension and participation was optional for those over the age of 65.

And overtime of more than 35 hours a week will not go towards pensionable earnings.

She stressed that the Act was still very much a work in progress. She said: "The definition of self-employed earnings is coming.'' Under the Act employers must make payments to pension accounts 30 days from the end of each month.

She said: "The intention is to have employers and employees both make contributions with the employer withholding employees contributions as least once a month.'' Employers failing to provide the pension or fund face fines of up to $50,000.

She said: "Participation is required the month after completing 720 hours of employment in a year.

"Employers can choose to time it from the date of employment or the date of entry into the plan.'' Mrs. Horner also set out the key dates of the Pension Plan. They are: Effective date for new plans must be January 1 -- even if paperwork is being completed.

Amendments must also be effective as of January 1.

Latest membership date for eligible full time employees is mid-April with funding in May.

If in a financial institution plan companies must show proof of participation in a sponsored plan by April 1.

If a new plan is being established it must be registered by July 1. For existing plans it's December 31, 2000.

Mrs. Horner continued: "There may be 360 or so monthly payments which should be 75-90 percent of pre-retirement income. For a monthly payout of $3,000, inflation adjusted, you will require approximately $500,000 to retire today.

"If you are over 45 years old it will be difficult to amass sufficient funds at the mandatory contribution levels. It's crucial to maximise the amount withheld as well as to consider other savings.'' Firms must obey new rules and regulations under the Act.

"An annual information report and financial statement must be filed for each plan, six months after the fiscal year end,'' said Mrs. Horner.

"An audited Financial Report must be submitted for each plan every three years or annually if plan assets are in excess of $1 million.'' She added that an Actuary Report must be generated every three years only for a Defined Benefit Plan.

She said that rising life expectancy and early retirement made pensions even more important.

She said: "It's possible retirees could draw on their pension for as many years as they worked.

"Building sufficient funds for retirement is critical - but when you retire don't lock yourself in. I can't stress enough the importance of diversifying your portfolios.'' Saving graces: Osprey Investments Vice President Patrice Horner tells Hamilton Rotarians about important amendments to the Pensions Act which came into operation on January 1.

Saving graces: Osprey Investments Vice President Patrice Horner tells Hamilton Rotarians about important amendments to the Pensions Act which came into operation on January 1.