Finance Minister the Hon. David Saul.

Of Bermuda's 32,000 workers, only about half were covered by a pension scheme, Dr. Saul told The Royal Gazette yesterday.

And of the 16,000 who did have pensions through their employers, half were in plans which did not separate pension funds from the company's regular cash flow. That meant the pensions were not protected.

"Three quarters of Bermuda's workers do not have a proper pension scheme, except what they get from the Government,'' Dr. Saul said. "This is not very good.

"We should do something about creating a national pension scheme whereby everyone in Bermuda, particularly young workers, would start contributing to their retirement.'' The national pension plan, promised in the United Bermuda Party's campaign platform, Blueprint for the Future, would require legislation, he said.

During the campaign, Premier the Hon. Sir John Swan promised the plan would be implemented by next February.

The Government pension, which paid about $680 a month, was only intended to supplement employer-based pension plans, Dr. Saul said.

Government would meet with employers to discuss how to set up the national plan. Dr. Saul's preference was a defined contribution plan, rather than a defined benefits plan.

A company that had no pension plan might be required to start putting aside money at a rate of one half of one percent of a worker's salary, matched by the employer. Over a number of years, the percentage of salary paid by the worker and the employer could be built up to five percent.

The money would be taken out of the company's cash flow, controlled by trustees, and invested, with regular reports about the fund's performance.

When an employee changed jobs, pension funds invested could be transferred to the next employer.

Most countries were moving towards defined contribution plans, Dr. Saul said.

In a defined benefits plan, payments were spelled out in advance, not determined by the performance of the fund. For example, a worker would receive a percentage of final year salary, multiplied by years of service.