approved another benefits increase for seniors in the House of Assembly on Friday.

But concerns were expressed about possible loopholes in the plan.

The Contributory Pensions (Amendment of Contributions and Benefits) Order 1993, which was approved unanimously, increased benefits by 7.3 percent and hiked contributions by 8.8 percent.

Finance Minister the Hon. David Saul said 1993 was to be the final year of a seven-year plan to annually hike pension benefits by nine percentage points above inflation.

But due to the recession and tight cash flow among small businesses facing increases in pension contributions, it was decided to phase the last increase over two years.

Thus, the 7.3 percent hike represented a 4.5 percent increase over the 2.7 inflation rate.

Contributions were increased more than payouts on the recommendation of Government's actuary. It was necessary to assure the pension fund would be solvent at the turn of the century, when the ratio of pensioners to contributing workers would be "less favourable.'' The differential would also provide a reserve for any reciprocal pensions with other countries which might be needed in future.

"There is no such thing as a free lunch in this ageing population,'' Dr. Saul said.

Shadow Finance Minister Mr. Eugene Cox said the ratio of workers to subscribers had declined steadily since 1985 and could reach one to one in the next century.

With a pension plan not introduced until 1971, there were living Bermudians, even some who worked for Government, receiving no pensions at all. Others thought they would receive pensions from their employers, but found upon retirement they did not.

That area "will have to be looked at more strictly'', he said.

The Progressive Labour Party welcomed the increase but wanted to know more about how it would be supported over the years, "so that we don't find ourselves insolvent'', Mr. Cox said.

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

What happened to pension benefits of those who contribute for years but die before age 65 needed to be addressed.

The Hon. Harry Soares (UBP) said Bermuda's pension scheme was relatively young and "everything takes time.'' There would be a 63 percent increase in benefits over eight years, and Government was striking "a delicate balance between what you would like people to have in pensions and who has to pay for it''.

"Without a viable business community, there will be no pensions for anybody,'' he added.

National Liberal Party Leader Mr. Gilbert Darrell said most Bermudians are pleased with the pension plan, but he knew of at least one employer who had abused pension funds an employee had paid. "I can give you a name,'' he said.

"I haven't heard of any action being taken by Government against him.'' Mr. Phillip Smith (UBP) did not think there was another country in the world increasing pension benefits at the rate Bermuda was.

For some seniors, it was the only source of income, and Government also provided rental assistance to those who needed it.

As for action against the employer Mr. Darrell referred to, "I think they're waiting for Mr. Darrell to report that individual''.

"I think that we take excellent care of our senior citizens.'' Before the pension was introduced, seniors relied on family members, he said.

The pension "helps them to maintain their dignity''.

Deputy Speaker Mr. Ernest DeCouto said too many people do not plan for their golden years, and the pensions improve quality of life.

The card system Government initially used was more effective, because it used stamps to show when contributions were paid and "left no room for delinquent employers''.

Mr. Reginald Burrows (PLP) was concerned about the non-contributory part of the pension scheme. He hoped it would eventually be phased out, but there were many Bermudians contributing to no pension.

Opposition Whip Mr. Stanley Lowe said many Bermuda seniors choose full coverage under the Health Insurance Plan (HIP), and Government should devise a way of indexing the pension to annual increases in HIP rates.

Dr. Saul said he accepted Mr. Lowe's point, but Government had to be careful not to mix up pensions and hospital insurance.

Government knew there were many who have not been contributing as much as they should, and is addressing that problem, he said.

The pension was not intended to be "all-encompassing'', but to supplement the incomes and savings of those who reach age 65, he said. "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.