The Finance Minister said a pay to play scandal last April had not tarnished Government's pension fund, which will pay out an extra $14 to $31.77 per month to seniors from August.

The Contributory Pensions (Amendment of Contributions and Benefits) Order 2006 was passed in the House of Assembly on Wednesday night, increasing pension benefits by four percent and contributions by 5.75 percent.

"In dollar terms this represents an additional $2.92 in combined employer/employee contributions per week," Finance Minister said.

Basic pension benefits were raised $31.77 per month from $794.30 per month to $826.07 per month, she said, while maximum pensions were raised $14 from around $1,061 per month to about $1,075 per month.

"Altogether, some 8,906 persons currently receive benefits under the Act," she said. "Seventy-two percent of the persons currently receiving benefits under the Act receive the basic contributory pension."

However, while Shadow Finance Minister supported the raise, she said pay-to-play allegations surrounding pensions could have compromised the integrity of the Pension Fund,

Allegations first surfaced on April 1, 2005, when Government's pension fund consultant Tina Poitevien allegedly arranged a luncheon for Deputy Premier Dr. Ewart Brown, with guests ? all allegedly connected with or potentially connected to the Bermuda pension funds ? asked to pay $2,500 to attend the luncheon, with cheques reportedly being made payable to "Dr. Ewart Brown (PLP)".

In the House on Wednesday night, Mrs. Gordon-Pamplin called these allegations concerns that needed more investigation.

"We have to look at if the fund remains viable, so the integrity of the fund is maintained," she said.

But Ms Cox said in order to maintain public confidence any pension fund managers seen to be under-performing were dismissed.

"The immutable facts are that the integrity of the fund has never been at risk," Ms Cox said.

In August 2004, pensions were increased by an "extraordinary" nine percent, the Finance Minister continued.

"In every case, the benefit increase has either exceeded the prevailing rate of inflation or has been in line with the underlying trend rate," she said.

But there was enough money in Government's Contributory Pension Fund ? $1.03 billion ? that even if the public stopped paying today, it would could continue to pay out pensions at the prevailing rate for 13 years, she said.

She said this was a relatively high fund level, the US held roughly three times its annual payments while Canada contained assets valued at two-and-a-half times benefits.

Bermuda had, as did much of the developed world, an ageing population ? meaning the number of retirees would soon outstrip the number of workers ? however, she said this was being countered by investing more than the Contributory Pension Fund's actuarial discount rate of 6.5 percent to seven percent, ensuring the system was on its way to achieving sounder financial footing.

But her Shadow said it was distressing that for some a basic pension was the only money they received.

"We all know it is very important that contributions are greater than pay-out," Mrs. Gordon-Pamplin said. "As demographics change, we will get an increase in the aged population and end up paying out more and higher than we thought."

Opposition backbencher said contributions were normally 1.25 percent over pay-outs but this had been raised to 1.75 percent.

Shadow Minister of Health and Family Services/Community Cultural Affairs and Seniors , said hospital insurance had increased 18 percent.

Around 43 percent of the Island's old people lived solely on their pensions ? some worth $400 per month, she said.

Mrs. Jackson also asked for a complete pension reform not a four percent increase.

But Ms Cox said while many people had pensions from Government and their employers, a fair number of retirees, relied solely on social insurance as their only source of income.

"Obviously this is not an ideal situation," Ms Cox accepted.

Contributions will increase from August 1 and benefits from August 16, she said.

The Order will go on to the Senate.