Last Friday, during the sitting of the House of Assembly, the Government proudly unveiled an initiative that will have a significant positive impact on the people of Bermuda.

Starting April 1, 2025, Bermudians will see administration fees applied to private pensions slashed, and the introduction of measures to prevent future increases.

Why is this important?

Every dollar in your private pension represents your hard work and dedication, and we believe it should be protected. With an ageing population and longer life expectancies, we must take steps to secure the financial future of our workers when they enter their golden years.

Under existing regulations, there are no limits on the amount plan administrators can charge for managing pension plans. After a comprehensive review by the Pension Commission and a leading Canadian pension consultancy firm, it became clear that there is significant variability in the fees paid by plan members, with many paying well above international standards.

Recognising the impact of high fees on the final pension balances of Bermudians, this government recognised that changes had to be made.

Effective April 2025, we will implement caps on pension plan administration fees. For those in group retirement plans, the fees will be limited to:

• 1.25 per cent per year for balances of more than $50,000

• 0.75 per cent per year for balances between $25,000 and $50,000

• 0.5 per cent per year for balances of less than $25,000

Similarly, for individual local retirement plans, the fees will be capped at:

• 1 per cent per year for balances of more than $50,000

• 0.75 per cent per year for balances between $25,000 and $50,000

• 0.5 per cent per year for balances of less than $25,000

I’m sure many are asking, “What does this mean for me?”

For individuals with pension balances over $50,000, the average annual savings will be $725, potentially adding up to more than $75,000 in additional retirement funds over a 40-year career.

For those with smaller balances, the average annual savings will be $125, totalling more than $14,000 over the same period. These changes ensure that more of your hard-earned money stays with you during your retirement — for your use and benefit.

In addition to capping fees, we are requiring pension plan administrators to include lower-cost investment options so that a broader spectrum of options can be provided, and are prohibiting the administrators from receiving advisory fees on any investment funds offered to plan members.

Safeguarding the financial wellbeing of our people and protecting the dignity of our seniors are high priorities for your Progressive Labour Party government. By limiting the fees deducted from your pension funds, we are making sure your savings are maximised for your future benefit.

This initiative demonstrates our commitment to ensuring Bermudians have a secure and dignified journey through their retirement years.

• Jaché Adams is a government backbencher and the Member of Parliament for Pembroke West (Constituency 19)