The Facts About Pensions



While it’s not something that we always want to focus on, a pension plan is key to planning for a comfortable retirement.


Article Image
  1. What is the National Pension Scheme?
    Bermuda’s National Pension Scheme was established on January 1, 2000 under the National Pension Scheme (Occupational Pensions) Act 1998. Under this Act, it is mandatory that employers (including self-employed persons) provide a pension plan for employees who are Bermudian or Spouse of a Bermudian. This applies to employees 23 years old or older and who have completed 720 or more hours of employment from January 1 to December 31.

  2. What about non-Bermudian employees?
    Employers can also provide non-Bermudian employees with the same plan or a different plan, but that is up to the discretion of the employer.

  3. How do employers establish a pension plan?
    Employers can establish plans with recognised financial institutions upon completion of the required application form. All plans that are subject to pension legislation- so those for employees who are Bermudian or Spouses of Bermudian -  must be approved and registered with the Pension Commission. 

  4. How are contributions made to the pension plan?
    With respect to mandatory contributions, those required by law, at least once a month employers are required to withhold up to a maximum of five per cent contribution of employees’ gross earnings. The employer is also required to contribute as a minimum the same amount and the combined total is to be paid directly to the plan’s approved pension plan administrator for payment into the pension fund within 30 days of the contribution being withheld. Employers may, if they like and subject to the relevant plan rules, cover the entire amount or part of the amount of the employee’s contribution. Employees can also make voluntary contributions.

  5. How do employees know how much is in their plan and how the plan is administrated?
    Employees receive a bi-annual statement from the plan’s administrator outlining the activity and value of the pension account or they can get an update online at any time.

  6. What investment options does Argus offer for employers?
    Argus Pension Plans for Employers offer a broad range of investment options, from Mutual Funds to Guaranteed Accounts and Self-Directed options. Employers can also elect to participate in our 401k plan if they have employees who are U.S. citizens, U.S. spouses of Bermudians or who hold dual Bermudian and U.S. citizenship.   

  7. What if I’m self-employed?
    Those who are self-employed must register for a self-employment pension plan. Those who fall into this category should be between the ages of 23 and 65, and have pensionable earnings of $20,000 or more in the calendar year.

  8. What are Voluntary Pension Contributions?
    Voluntary pension contributions are contributions made to a pension plan by a plan member beyond the mandatory contribution amount required by law. Voluntary contributions can be withdrawn in cash upon termination of employment, death or retirement.

  9. Who can make a Voluntary Pension Contribution?
    Additional voluntary contributions can only be made by an employee, but can be paid into a pension at any time.

  10. What if my employer or I fail to comply with the mandatory pension plan or mandatory contribution requirements?
    Failure to comply with this law can result in a fine up to $50,000 or imprisonment for up to five years, or both.

  11. How is my pension paid to me when I retire?
    If you are a member of a registered pension plan, upon retirement you can receive your pension as a regular annuity payment for the course of your lifetime. Alternatively, following retirement you can elect to make withdrawals from your account up to a maximum percentage determined by the Pension Commission. Payments can only be made payable to the retiree/annuitant and are normally paid into your bank account either in Bermuda or overseas if you relocate.  Upon your death, benefits will be payable to your beneficiary based on the form of pension that you elect.  

  12. What happens with my pension if I leave my job?
    If you leave a job, under the Argus plans, members can transfer their account balance to a new employer’s plan or to a prescribed retirement product.

  13. Who can answer my questions about pensions?
    The Pension Commission is the body responsible for overseeing the proper administration of the National Pension Scheme. They can be contacted with questions at 295-8672. More information can be found on The Pension Commission website. Or talk to an expert at Argus about pension plans.

If you have any questions about your plan, please contact your pensions administrator.


This information is not a substitute for professional advice, you should always consult with your independent professional advisor.