pension funds to new investment strategies being marketed by subsidiary, Bermuda Life Insurance Co. Ltd.

Since increased awareness has been spurred by a Government discussion paper on pensions, the Argus Group has seen a handful of relatively large employers switch to its Bermuda Life.

Argus Group sales manager Gerald D.E. Simons said that it is the strength of the company's balance sheet that has lured more pension business.

But he said that the National Pensions Green Paper will mean for pension plan providers a need to develop new products, train staff and develop new systems.

( The Royal Gazette November 12).

"It's a very expensive undertaking to gear up to cope with the rush of business that we anticipate as a result of making pensions mandatory,'' Mr.

Simons pointed out.

"There are two categories of employers. Those who don't have plans at all will have to give serious thought to establishing them and coping with the expense of the new benefit. That expense will be running from three to five percent of payroll and its a major consideration, even though there is a provision that allows them to phase it in over years.

"Employers who already have plans will have to ensure that they comply with the regulations proposed to be made under the proposed pension legislation.

"For plans operated by Bermuda Life, there shouldn't be any problems, because these plans already comply with regulations made under the payroll taxes act.'' Exactly what required changes will be, won't be known until final legislative proposals are adopted, but insurers are anticipating some changes. Vesting provisions shall require administrative changes and more expense to employers.

But some $17 million in pension funds were transferred to Bermuda Life from other carriers in 1995 and a further $10 million was transferred during the year to March 31, 1996. ( The Royal Gazette July 11).

"Funds held for deposit administration pension plans have grown by over 80 percent in just two years,'' shareholders were told in the recent annual report.

The deposit administration pension plans at March 31, totaled $111,432,000, a 24.5 percent increase in 12 months.

Bermuda Life now offers the Capital Accumulator Pension Plan, a defined contribution plan that provides for investment in equities markets. It is a step beyond the Interest Accumulator Plan in which the assets were simply invested in fixed interest securities, such as bonds and mortgages.

Although they are safe investments with little risk, they also meant typically lower returns than equities. The Capital Accumulator, the new plan, allows for almost tailor-made investment strategies, depending on one's tolerance for risk.

The new plan does not require pension contributors to accept any more risk than they are currently exposed to, but simply provides an opportunity to absorb additional risks in seeking higher returns and better pension growth.

Said Mr. Simons, "The Green Paper itself encourages employees to invest their money for the long term and investment in equities have traditionally outperformed investments in fixed interests. There is a chance to enhance pensions through better investment opportunities.

"The plan remains simple for the employer to administer and its easy for employees to understand.'' The Green Paper estimates that half of Bermuda's employees have pension plans, although only half of them have appropriately structured plans. A large number -- estimated to be in the hundreds -- of small firms have no plans at all.

LURING NEW BUSINESS -- Argus Group sales manager Gerald Simons