People feeling pinch can access pensions
People who have felt the pinch as a result of the Covid-19 shutdown can take up to $12,000 from their private pension funds after the legislation was fast-tracked in the House of Assembly yesterday.
Curtis Dickinson, the finance minister, said the Government was “mindful of the long-term implications” of the move.
However, he added that the risks of relaxation of pension rules had to be balanced with the “immediate and urgent needs in our community that have resulted from this unexpected crisis”.
He said the amendments had been approved by the Pension Commission, which would also offer “a financial awareness campaign”.
Mr Dickinson said the funds had been put aside for a “rainy day”. But he added: “I would suggest one of those days is upon us.”
He confirmed that applicants would not need to prove hardship to get payments from their pensions.
Mr Dickinson explained that the decision was intended to make the process as “effective and responsive” as possible so people who needed their money could access it as fast as possible.
He added that the Pension Commission was also looking into the possibility of a “loan feature”, but warned that would have a slower turnaround time and involve a more complex process.
Patricia Gordon-Pamplin, the shadow finance minister, said the Opposition appreciated the hardships caused by “unprecedented circumstances”.
She highlighted that the House had passed legislation last year to allow employers and employees to agree to drop pensions contributions.
An amendment to permit employees to take out a quarter of their private pensions as a lump sum on retirement was also approved.
But Ms Gordon-Pamplin said people should not touch their pensions if possible.
Renée Ming, a Progressive Labour Party backbencher, said no other finance minister had been forced to contend with a global pandemic and appealed to people who withdrew from their pensions to “put this money back into the community”.
Trevor Moniz, a One Bermuda Alliance backbencher, warned against use of pension cash to launch a business during a recession.
Michael Dunkley, also an OBA backbencher, said “many people were struggling before Covid-19” which had “magnified the challenges”.
He added that it would be good if people who withdrew pension funds paid the money back in when they could, but predicted many would not be able to do that.
Jeanne Atherden, the OBA MP for Pembroke West, said: “Whatever they are going to use it for, people need to recognise that it's something that has some long-term consequences.”
David Burt, the Premier, said the goal of the change was to make sure people had access to their own savings when they needed them most.
He added that the scheme could also help put millions of dollars into the economy at a desperate time.
Mr Burt said: “People may do things to manage their hardship, but they may also do something to put themselves in a better financial position.”