Bermuda?s Pension Commission is set to make a recommendation to Government that could see more people receive lump sum pay-outs for their pensions.

Commission CEO Peter Sousa said at present, lump sum pay-outs are overly restricted, which leads to high administrative costs for companies and tiny pension cheques to some retirees.

As the law stands, he said, employees can only receive a one-time pay-out on their pension if the total amount in the pension is less than five percent of their annual salary.

As a general rule, pension money is ?locked in? once an employee has worked for a company for over two years.

Exceptions are only made under the Bermuda Pensions Act 1998 for very small pensions.

Mr. Sousa said, for example, if an employee is earning a wage of $50,000 yearly, the five percent provision would allow for no more than $2,500 in pension savings to paid out as a lump sum on retirement.

As a result ?a lot of people are caught in a no man?s land?, he said.

?They may be close to retirement, but only plan to be working for a few more years.

?Rather than force an employee to receive $10 to $20 a month, it might be more appropriate for them to take all of their money out.?

The administrative cost of continually shelling out an annuity of $10 to $20 a month is an unnecessary additional expense to many companies, he added.

Mr. Sousa said the recommendation the commission would make to the Ministry of Finance would not include any target percentage or dollar amount, however.

Industry professionals also told The Royal Gazette the recommendation makes economic sense.

?Bermuda Fire and Marine (BF&M), along with other local pension carriers, have suggested to the Pension Commission since the inception of the Act that the small pensions as set out in the Act should be increased,? said Carol Bassett at BF&M.

?We would support an amendment to the Act that will allow the industry to make cash payments to those pension members who have $10,000 or less in their fund at age 65.?