Following our advisory on the legislative amendments to the National Pension Scheme dated 17 February 2020, the Minister of Finance announced on Friday 28 February 2020 that certain provisions of the National Pension Scheme (Occupational Pensions) Amendment Act 2019 (the "Amendment Act") would not become operative on 2 March 2020 as originally intended.
In accordance with the Amendment Act, it was anticipated that as of 2 March 2020, the enrolment in a registered pension plan was no longer limited to Bermudians or the spouse of a Bermudian, as the definition of 'employee' had been extended to any person who is employed by an employer, except those persons who had been granted permission under the Bermuda Immigration and Protection Act 1956 to engage in gainful occupation in Bermuda, unless that person has been granted such permission for an aggregate period not exceeding 12 months. However, as announced by the Minister, the National Pension Scheme (Occupational Pensions) Amendment Act 2018 (No.2) Commencement Notice 2019 (the "Commencement Notice") excludes such provisions that relate to the requirement for non-Bermudian employees to be enrolled in a registered plan, unless otherwise exempted.
Additionally, in relation to the locking in of contributions and benefits, the Amendment Act allowed persons in circumstances of financial hardship and members or former members who had attained normal retirement age who have retired, to receive up to 25% of their account balance in the case of a defined contribution pension plan or local retirement product, or 25% of the commuted value of their benefits, in the case of a pension plan that provides defined benefits. These provisions were also excluded in accordance with the Commencement Notice.
The Minister noted that the decision to delay the relevant provisions, "was taken after consultation with the Pension Commission and representatives from the private sector, in order to permit further solutions to be provided, for example, to accommodate existing plans already established for non-Bermudians in overseas jurisdictions, by employers in Bermuda." The Minister further noted that "the extension of time will assist all parties in better accommodating the Government's policy objectives of ensuring that there is a level playing field between all employers and their respective employers, regardless of their nationality."
This advisory provides a brief summary of key changes. The impact of the amendments need to be considered on a case by-case basis.
Walkers' Regulatory & Risk Advisory practice group comprises a team of dedicated specialist lawyers who will be happy to advise on all aspects of the amendments. Walkers has the expertise to assist employers, administrators, employees or other persons dealing with a pension plan, pension fund or local retirement product, that wish further clarification on the amendments to the Act, to discuss the changes and how they may impact your future further.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.