Bermuda Revises Pensions Scheme

Connecticut Enacts Paid Family and Medical Leave
06 January, 2020

Changes to Bermuda’s National Pension Scheme include a requirement to enroll most expatriate employees in a pension plan registered in Bermuda, with an exemption for US citizens who participate in a 401(k) plan. The changes feature in the National Pension Scheme (Occupational Pensions) Amendment Act 2019 that passed parliament in November 2019.  

Highlights and effective dates:

  • Expatriate employees working in Bermuda for periods exceeding 12 months must enroll in a Bermuda-registered pension plan. Under the old law, only Bermudians and their spouses were required to enroll. However, US citizens enrolled in a 401(k) plan are exempt. (2 Mar 2020)
  • The vesting period has been reduced from two years to one year. (2 Mar 2020)
  • Former members who have reached the normal retirement age and retired can cash out small pension benefits not exceeding BM$50,000. (2 Jan 2020)
  • Members and former members who have reached the normal retirement age and retired can withdraw a lump sum up to 25% of the value of their pension account or commuted value of their benefits.
    (2 Mar 2020)
  • Employers will be subject to new recordkeeping duties for payroll and pension information.
    (2 Mar 2020)
  • Annual defined benefit statements issued to members must include a summary of fees and expenses. (30 Dec 2019)
  • Audited pension plan financial statements must be prepared if their market value exceeds BM$3 million, up from BM$1 million. (30 Dec 2019)
  • Employers and pension administrators face tougher sanctions for non-compliance. (2 Mar 2020) 

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Graham Stone
by Graham Stone

Principal, Mercer Wealth

Fiona Webster
by Fiona Webster

Principal, Mercer’s Law & Policy Group

Stephanie Rosseau
by Stephanie Rosseau

Principal, Mercer’s Law & Policy Group

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