approved in the House of Assembly yesterday.

A 7.3 percent increase in pension benefits, and an 8.8 percent jump in contributions, is to take effect in August.

During the debate, MPs on both sides of the House praised Bermuda's pension scheme as one of the finest in the world. But concerns were also voiced about possible loopholes in the plan.

Finance Minister the Hon. David Saul said 1993 was initially intended to complete a seven-year phase-in of a major pension benefit increase. For each of the last six years, Government raised benefits by nine percent above the rate of inflation.

But as payouts rise, so must contributions. Small businesses in Bermuda were still hurting from the recession, and Government decided to phase in the final increase over this year and 1994, Dr. Saul said.

Thus, the 7.3 percent hike represented a 4.5 percent increase over the Island's inflation rate of about 2.7 percent.

The Opposition supported the Government initiative. The Progressive Labour Party wants "to bring pensions more realistically in line with the cost of living in Bermuda, and it seems to be happening here today,'' Shadow Social Services Minister Mr. Nelson Bascome said.

Concerns were expressed about Bermudians who received no pensions, and about misuse of pension funds by employers.

Dr. Saul said the pension was only meant to supplement the income and savings of those who reach 65. "The Government is concerned that at the present moment not every employee in Bermuda is registered and making contributions to a private scheme,'' he said.

In the next session of the House, Government would bring forward a paper aimed at creating legislation to address that problem.