Employers will be given a grace period well into the next century to comply with planned provisions in a new Pensions Bill.

New primary legislation will establish a Pensions Commission -- a new, regulatory and supervisory body for all pension schemes in Bermuda.

But regulations to accompany the statute are not expected immediately and could come as much as a year later.

Based on the National Pensions Green Paper, the measures will be designed to improve pension provisions and provide for portability from one job to another.

Said BF&M Ltd. vice president Judy Panchaud White: "In Bermuda, you probably have about 50 percent of the work force who are not covered by a private pension plan. All they may have to rely on at retirement is the social security system -- the Government scheme.

"The Government is trying to ensure that everyone in the workforce has some type of pension plan in place, other than just the social security programme.

"They will do that by legislating that every employer must have a pension plan, similar to current requirements that every employer have a health plan.

And there will be minimum requirements for that pension plan.'' Government's Throne Speech has ambitiously stated that the legislation will "ensure a living wage on retirement''.

Local authorities agree with international thinking that pensions should at least provide benefits between 67 and 75 percent of the pre-retirement wage or salary.

It is believed that if private pensions were held to a standard that would require retirement benefits of between 50 and 60 percent, the additional benefit derived from government's own Contributory Pension Fund (CPF) could make up the difference.

The CPF currently expects to yield on average about 25 percent of pre-retirement salary for the average contributor.

One aspect of portability provisions is to lock in the vested benefit almost immediately after an employee signs up for a pension.

Pension grace period firm for five to ten years before they can qualify to later have access to the employer's portion of the contribution.

It is also important because it will remove from an employee who leaves a job, the temptation to spend the money and end up with little or no pension upon retirement.

Argus Insurance managing director and CEO, John Sainsbury said: "Companies will have to be prepared to accept funds coming in when a new staff member joins, and combine their incoming pension assets with the company's existing fund. The sum of money would have to be integrated into the new employer's scheme.

"This wasn't a facility before. Most plans are administered through insurers.

We have more than a hundred plans and now we are gearing up to be able to facilitate that. In some cases we have already been doing that.'' Assistant Financial Secretary Donald Scott said on Friday that the provisions will have far more benefit for the work force of the future than for those already approaching retirement age.

He said: "Those who are in the work force now and are within say ten to 15 years of retirement, will probably derive little impact from this legislation.

"The thrust is really long term. It's really attempting to avoid any social crisis that might arise 35 to 40 years down the road. It is really attempting to put in place a foundation for long term, income security for pensioners in Bermuda.'' Officials agree that employers should have an initial five to seven year grace period to comply with the new requirements, especially if they have no such scheme already in place.

It is envisaged that a minimum target of contribution would be about ten percent of the wage, shared by the employee and employer, reached over some five to seven years.

Mr. Sainsbury pointed out: "In order to be really comfortable in retirement and get a really decent pension, with any hope of indexing for inflation after retirement, you are probably talking about making contributions over the last 20 to 25 years of about 15 percent of salary.M "The contributions vary a lot at the moment. Some of the unionised workers -- I believe hotels may be one -- have schemes which call for three percent to be contributed each by employee and employer. That was subject to negotiation, but that's quite low.

"A very common plan now is five and five, with the ability of the employee to put in additional contributions.''