ssa.gov (01.06.2020) For members from certain occupational pension plans that are younger than age 65 (the normal retirement age) and who are not yet retired may request one-time withdrawals of up to B$12,000 (US$12,000) from their account balances. The deadline for requests is June 30, 2021, and pension plan administrators must process the withdrawals within 20 business days after approving a request. This measure is part of an economic relief package for persons affected by the COVID-19.
For members from certain occupational pension plans that are younger than age 65 (the normal retirement age) and who are not yet retired may request one-time withdrawals of up to B$12,000 (US$12,000) from their account balances. The deadline for requests is June 30, 2021, and pension plan administrators must process the withdrawals within 20 business days after approving a request. This measure is part of an economic relief package for persons affected by the COVID-19.
Bermuda Introduces Lump-Sum Withdrawal Options for Certain Occupational Pension Plans
On June 1, Bermuda's government implemented two amendments to the National Pension Scheme (Occupational Pensions) Act 1998 that allow members of defined contribution occupational pension plans to withdraw a portion of their account balances as lump sums. (The amendments also cover local retirement products; no details are available on these products.) Under one amendment, members younger than age 65 (the normal retirement age) who are not yet retired may request one-time withdrawals of up to B$12,000 (US$12,000) from their account balances. The deadline for requests is June 30, 2021, and pension plan administrators must process the withdrawals within 20 business days after approving a request. Under the other amendment, members aged 65 or older who are retired may request one-time withdrawals of up to 25 percent of their account balances. (Previously, retirement benefits were only paid as monthly pensions based on the insured's average earnings or the amount of the insured's accumulated capital, depending on the pension plan's specific rules.) The new withdrawal option for members younger than the normal retirement age is part of an economic relief package to assist persons negatively affected by the COVID-19 pandemic, while the amendment for those who have reached the normal retirement age was approved (without an implementation date) in December 2019.
Bermuda's pension system consists of: (1) a social insurance program for employed and self-employed persons aged 18 or older working more than 4 hours a week, and temporary residents gainfully employed for more than 26 consecutive weeks; (2) the mandatory occupational pension program for private-sector employees aged 23 or older who have worked 720 hours or more for their current employer in any calendar year, and self-employed persons aged 23 or older with annual earnings greater than B$20,000 (US$20,000); and (3) a social assistance program that includes an old-age social pension (for Bermudian workers) and a disability social pension (for all Bermuda residents). The social insurance program is financed through flat-rate contributions by employees and employers of B$35.92 (US$35.92) a week each (none for employees aged 65 or older); the mandatory occupational pension is financed through employee and employer contributions of 5 percent of gross covered earnings/payroll; and the social assistance program is financed through general revenues.
Sources: National Pension Scheme (Occupational Pensions) Amendment Act 2019 Commencement Notice 2020; National Pension Scheme (Occupational Pensions) Amendment Act 2020; “Bermuda Approves Amendments to Mandatory Occupational Pension Program,” International Update, U.S. Social Security Administration, February 2020; Social Security Programs Throughout the World: The Americas, 2019, U.S. Social Security Administration, March 2020; “Bermuda Amends National Pension Scheme–Update #3,” Conyers, May 2020; “Further Amendments to Bermuda's Pension Scheme,” Carey Olsen, May 27, 2020.