yesterday.

For the combination of a shrinking workforce, earlier retirement and people living longer lives could leave Bermuda in the red in the long-term.

Health and Social Services Minister Harry Soares said: "People are entering the workforce later and leaving it sooner -- the fact that people are living longer but working fewer productive years.

"It's a double whammy which is coming down the line and it concerns everything -- pensions, healthcare and housing.'' Mr. Soares said Government's contribution to health care for the elderly -- starting at 80 per cent of costs at the age of 65 -- was "astronomical.'' And he added that spiralling costs of healthcare due to the greying of Bermuda was one of the sparks which set in train a Government health care review.

Mr. Soares said: "What concerns us is that is whether the younger generation will be prepared to pay more taxes to support the aged.'' Mr. Soares said that patients losing mobility with age were having to seek residential care.

He added: "The Extended Care Unit at the King Edward Hospital has a waiting list of probably a year or so and Lefroy House also has a waiting list.

"The birthrate has gone down and employment has also gone down -- the total number of guest workers is 3,000 down on what it was six or seven years ago.

"They were all paying taxes, buying things, paying import duties and we also got payroll tax.'' Bermuda -- in common with much of the rest of the world -- is undergoing a population change because people are living longer and having fewer children.

The population of Bermuda grew 56 percent between 1950 and 1991, while over the same period, the over-65 age group rocketed by more than 150 percent.

The median age has moved upwards from 25 and is expected to hit 37 by the early years of next century.

That means that over the long-term, a shrinking pool of workers would be supporting an increasing number of elderly people. Already, the majority of social assistance claimants are over 55.

Finance Minister Grant Gibbons said Government was pressing ahead with plans to introduce a national pensions scheme to address potential future problems.

He said the current Government contributory pension scheme was based on a "pay as you go'' system.

Dr. Gibbons explained: "Payments in are put out in the same year as benefits to pensioners.

"The difficulty you get into at a later point is when your elderly population rises to a certain percentage -- then the amount put in is less than the amount put out.'' But Dr. Gibbons stressed that even if pension contributions were to cease immediately, there was enough cash in the kitty to ensure pensions would still be paid out as normal for between three to five years.

1 Politicians fear pension crisis monthly payment of just over $750 a month was not enough by itself to live on.

Dr. Gibbons said: "We want to put in place a pension scheme, a proper pension scheme, through existing and future business.'' The new scheme will create rules for pension plans run by the private sector run by a Pensions Commission, although the Government scheme will continue to operate.

The target contribution will be ten percent of the worker's salary shared equally between the employee and the employer with pensions being transferrable between employers.

Dr. Gibbons said: "The reason for bringing in a national pensions scheme is that we will be able to ensure the working person will be now properly protected when they retire.'' He added that one of the things to be decided was the future of the Government contributory pension fund.

Dr. Gibbons said changes could be made to the fund, but there there were no immediate plans to disband it.

He added one of the Pension Commission's roles would be to examine the current Government scheme.

Dr. Gibbons said: "A number of suggestions have been made -- whether it would be disbanded in the future or continued as a Government scheme, it's too early to say.'' Progressive Labour Party finance spokesman Eugene Cox said he agreed something needed to be done to avert a future pensions crisis.

But he added: "We need to understand the impact on business, particularly small business.'' And he said: "Pensions haven't been monitored or scrutinised as they should have been. People thought money was being extracted for their pension, but it wasn't being paid.'' And he added those who were capable of working past the normal retirement age of 65 should have their rights respected.

Mr. Cox said: "Pensions are a very important and serious subject which needs to be addressed -- but I think Government are fooling people.

"They're doing a bit of window- dressing and trying to give the impression they're in control.''