Greedy employers could take advantage of the national pension scheme to slash retirement benefits, Pension Commission chairman Roger Titterton has claimed.

His warning comes after oil giants Esso and Shell were accused of planning to slash payouts.

Mr. Titterton was keen to distance himself from attacking any particular firm.

But he said: "We are concerned with recent reports and by rumours that are causing employees to question employer motives.

"The purpose of the new Act is to introduce pensions for employees who do not currently have them and to ensure that existing pensions are of a high standard.

"It is not to have any reduction in benefit or increase in cost for current employees of businesses that presently have good pension plans, including plans that may exceed the requirements of the Act in some aspects.

"For instance, under the new Act the employer has to pay five percent into the pension fund. But if you have a company who were paying the whole ten percent, they might take the chance to pay just five percent and make the employee pay the rest.

"That doesn't seem very fair to us.'' However, he admitted if companies were determined to slash retirement benefits, there was little that could be done.

He said: "If this happens, employees can talk to their employer and go to the union if they have a negotiated agreement.

"Other than that there is no recourse if the employers meet the requirements of the new Act.'' Ed Ball, general secretary of the Bermuda Public Services Association, said this was a source of concern.

And he warned that some schemes could be at the mercy of the peaks and troughs of the market.

He said: "In the US employers have tried to save money by moving to defined contributions where the market decides the rate.

"So if the funds are invested in Asia and the market collapses, then this will be reflected in the money people eventually get.'' And Bermuda Industrial Union president Derrick Burgess said he would be very concerned if a company was trying to dilute current pension deals.

He said: "It would be against the spirit of the Act if the scheme is within the guidelines or above to make it lower.'' The new Act, which comes into operation in Bermuda on January 1, was set up to combat the affects of an aging population.

Pension scheme worries Currently contributions from employees fund the retirement pay for today's pensioners. But as the number of pensioners rises, the workforce would be forced to pay more and more of their earnings.

From January 1, employers will have to put each employee into a private pension scheme which will act as a top-up pension to the state retirement benefits.

The new scheme, with its emphasis on private contributions, should allow pensioners to get packages worth 65 to 70 percent of their current salaries.

Mr. Titterton said the Commission did not have details on specific companies who might be taking advantage of the new deal, nor did they have the mandate to comment on them.

And he warned employees not to panic if their company was changing their plan.

He said: "When plans are changing the employee will wonder if something bad is happening because there is a lack of trust in these situations.

"Pensions are a confusing issue. I would advise people to seek advice from independent pension plan administrators at banks and building societies.'' He also said worried workers could contact the Commission itself when its offices in the RamRe building in Reid Street are up and running in about six weeks' time.