Proposed pension increases have been passed by the Senate after a short session of business yesterday which was marked by few fireworks.

As of August there will be a 3.5 percent increase in public pension benefits and a resulting 4.75 percent increase in contributions ? adjustments which bring the total percentage increase in benefits to 23.3 percent over the past seven years.

While the majority of Senators agreed with the changes, Opposition Senator E.T (Bob) Richards grabbed the opportunity to discuss what he called an "erosion" of public confidence in the pensions system over the last few years because of "frequent" scandals.

"Ninety percent of Bermudians probably don't have a clue what we're talking about when we go on about pensions," he said.

"But in recent years the pension issue has been thrust into the limelight. And it is unfortunate when these controversies arise because it erodes confidence in a system which is meant to help people when they retire."

He claimed there had been a "shift in focus" away from pension recipients to service providers ? pointing to the "dangerous" rule passed in 2000 which decreed that 30 percent of business generated from the public funds portfolio should be given to local stockbroking firms.

"That rule has precedent in many other countries, of course," he said.

"But the problem is that in a small place like Bermuda, conflicts of interest inevitably arise and there were people on the committee who made that decision who were brokers themselves. Furthermore, there is no rule to say that if these local brokers do not do their job properly that they will be struck off the list. It is just a gift with no statutory obligation to perform. These kind of things tend to create inefficiencies and a sense that everything is not right and that everything is not clean."

Sen. Richards then moved on to question Government's decision not to inject $2 million into the pension fund as promised in the latest budget.

Finance Minister Paula Cox announced two weeks ago that the plan had been changed in light of the funds strong performance over the last year in which its total assets had increased by March to $932 million ? up from $858 million at the same time last year.

But how, Sen. Richards asked, did the Ministry get its predictions wrong and what was now going to be done with the $2 million injection set aside for the fund?

Would it not be "prudent", Sen. Richards asked further, to invest that money in the fund anyway so that the contributory pension increases of 4.75 percent could be somewhat reduced?

Meanwhile, Opposition Senate Leader Kim Swan pointed out that pension increases were not keeping pace with the current rate of inflation and that seniors in particular were still struggling to pay their bills.

The abolition of the mandatory retirement age to allow seniors to work if they so wish has to be the next step, he argued.

In response, Government Senators Walter Roban and Raymond Tannock expressed surprise at the Opposition's "negative" attitude to what was in essence a "welcome and sensible" pensions increase.

No indication was given, however, as to how the now spare $2 million dollars is going to be used.