Senators pass pension and economic substance bills
Senators rattled through the orders of the day in today’s Upper House yesterday, wrapping up the session in just over half-an-hour.
Senator Arianna Hodgson, the junior minister of finance, presented the Economic Substance Amendment Act – the first of just five items on the order paper.
The legislation updates Bermuda’s economic substance regime in order to keep it in line with European Union regulations.
Senator Hodgson said: “The EU code of conduct group has determined that the scope of the economic substance regime must be expanded to include all forms of partnerships and not just those partnerships that have elected to have a separate legal personality.”
Senator Hodgson said the amendment demonstrated Government’s commitment to high international standards and would ensure that Bermuda remained off the EU’s tax haven blacklist.
The bill was supported by the Opposition One Bermuda Alliance.
Senator Marcus Jones said: “We have no objections to this bill. We see the importance and the necessity to ensure that partnerships in all forms are included under this substantial bill to keep in line with international standards.”
Two further bills, The National Pension Scheme (Occupational Pensions) Amendment Act and the National Pension Scheme (Refund) Temporary Regulations 2021, were also rubber-stamped after being passed in the House of Assembly two weeks ago.
The amendments allow members and former members of a defined contribution pension of normal retirement age to apply for a lump sum refund whether they have retired or not, of up to 25 per cent of their balance.
It also allows those who have not reached retirement age to apply for up to $12,000.
Independent senator John Wight gave the bill his backing.
He said: “I’m very supportive of this legislation. I think Bermudians need to prioritise their immediate financial needs, which this efforts will assist them in doing.”
But he warned: “At the same time they have to recognise that withdrawing funds should only be done when absolutely necessary because the amount of retirement savings will be reduced going forward.
“I think that this is one of many strong initiatives that Government initiated in 2020 to assist people in their time of need.
“I think the island overall has done very well relative to what the people assumed it might look like following 15 months, 16 months of the Covid pandemic.
“Acknowledging that there are many individuals and families and businesses that are very much hurting, I think this is the right move at the right time.”
Senator Jones agreed and said: “We on this side of the aisle have an appreciation of the need for this legislation.
“We all as legislators would like not to have come to this position, but we have no choice.”
He suggested that pension plans were increasingly becoming a resource for current needs rather than as an investment for retirement, and urged that funds should only be withdrawn “as a last resort”.
He said: “Be that as it may we can appreciate what the Government has done here. It’s a needful and important last resource effort. Understand that it is the citizens who are bailing themselves out – those that have come to a point of no option but to delve into their pension.”
The two final bills involved the transfer and sale of parcels of land owned by the Corporation of Hamilton.