This is any amount of payment above what the Government states in law. For example an extra 2 percent of wages could mean a significantly higher payment at retirement and may be an option looked at by those over 55 getting a personal pension for the first time.

------ Annuity A regular payment of money or a future stream of guaranteed annual income purchased by an immediate lump sum payment. This lump sum is calculated by Discounted Cash Flow and varies according to the rate of interest. Annuities can be certain or terminable life, immediate, differed or perpetual.

------ Back-end loading The incorporation of administration fees to the final payments.

------ Commuted Value This is what a pension would be worth in a lump sum for a certain date.

------ Eligibility To be entitled to the new pensions under the act you have to be at least 23 years old, and can apply up to the age of 64. A minimum service of 720 hours must be done and the employee must be Bermudian or the spouse of a Bermudian.

Others are eligible for personal pension plans.

------ Front-end loading The incorporation of administration expenses into the first payment.

------ Investment Profiles How much risk is taken with money invested. At one end of the scale Guaranteed Profile offers not risk but lower returns. At the other end an Aggressive Profile means high risk, with the possibility of higher returns. The investment can be split into all guaranteed fixed income such as fixed interest securities or part guaranteed fixed income with a mix of more risky mutual funds. Bond funds straddle the middle road of risk.

------ Locked-in Means that a lump sum cannot be taken out and cash is bonded to provide a life-long retirement income for the future.

------ Lump sum Is a one-off cash payment in whole or part which can be made instead of annual or monthly payments. Generally the act restricts a pensioner from receiving a lump sum on retirement.

------ Mutual Fund A pooled system of group investment. The funds are chiefly invested in stocks and bonds.

------ Pension This is a regular income after a certain age and usually after retirement from work provided by a state or private scheme. Most countries have state as well as private schemes.

------ Portability Is a pension that can be moved with individuals when they change jobs.

------ Retirement The normal retirement age in Bermuda is 65. The pension law allows early retirement from 55 onwards, with reduced pension benefit.

------ Vesting A worker can no longer withdraw any contributions made to a pension plan. The worker becomes fully vested in the plan when he or she has worked for an employer for a period that does not exceed two years.

------ Wind up The ending of a pension plan, with the distribution of assets of the plan.

------ This is what companies have to do Registration: All companies have to register their plans with the Pension Commission by June 30, 2000. This is the date that employers and employees have to begin making contributions to the plan.

------ Contributions: Starting January 1, 2000 both employer and employee must contribute 1 percent of the employees earnings to the employee's pension. From the same date the following year the amount goes up and both employers and employee must each contribute 2 percent of the employees earnings. The following year this goes up to 3 percent and in 2003 it will be 4 percent. Finally by January 1, 2004 the goal of 5 percent will be reached and will continue at the same rate for the foreseeable future.

------ Non-compliance: If a company ignores the deadline of June 30, 2000, they can face fines between $10,000 and $50,000 and time in prison.

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