Plans to let people access their private pension funds won the backing of the Opposition last night after it emerged the legislation only applies to residents suffering extreme financial hardship.

Finance Minister Paula Cox said the National Pension Scheme (Occupational Pensions) Amendment Act is an "onionised bailout for Main Street for those people in hardship", opening up pension funds to:

[bul] those who can't afford uncovered medical expenses;

[bul] those who can't afford education fees;

[bul] those who risk losing their home due to debt default.

Shadow Finance Minister Bob Richards, who previously warned the proposal could lead to many people having nothing to retire with, yesterday said his fears had been alleviated by the details provided by the Minister.

Ms Cox said the maximum refund will be 20 percent of the account balance on the application date; and each person will be limited to one application in a five-year period and two applications in their lifetime.

The Minister told the House of Assembly "There will be various checks and balances in place to ensure plan members do not abuse this proposal or apply to withdraw the majority of their pension benefit accrual.

"For instance, all refunds under the proposed regulations will have to be approved by the Pension Commission, who will ensure that all applications meet the conditions set out in the regulations.

"This proposal is sensible and strikes the right balance between allowing plan members access to their private sector pension funds under extreme hardship conditions while at the same time providing some protection in ensuring that plan members receive a decent pension when retiring."

[JUMP]Explaining why the move is needed, the Minister said "The financial stress and strain placed on the shoulders on long-term unemployment persons is very often unbearable.

"Such persons are put at risk of losing their homes, not being able to receive necessary medical treatment and some others have had to suspend college and university education for their children."

She said that initially the Pension Commission did not support the idea because of concerns over potential mass withdrawals, but approved after a narrow scope of circumstances under which withdrawals are allowed was identified.

Mr. Richards told the House "When I first saw this I had some grave misgivings about it. I have to say that many of my misgivings have been alleviated by the introduction by the Minister.

"Clearly there are people undergoing hardship and I think it's appropriate to bring this legislation before us today."

Progressive Labour Party backbencher Terry Lister and United Bermuda Party MP Patricia Gordon-Pamplin both urged those in need to take advantage of the maximum 20 percent they are entitled to.

Mr. Lister said he is concerned families whose homes are at risk, adding: "There's no more important asset to a family than their home."

Bermuda Democratic Alliance MP Shawn Crockwell said his earlier concerns had been alleviated and that he hoped people would not end up spending today what they need in the future.

Energy Minister Michael Scott also praised the legislation, which he said showed Government is responsive to people's needs.

The bill was passed last night, along with four other pieces of legislation related to the Budget: tax breaks for taxi drivers; stamp duty and land tax increases; and doubling the foreign currency purchase tax from 0.5 percent to one percent.<\p>For more details on those four debates, see tomorrow's Royal Gazette.