BPSU backs cash withdrawals from pension funds
Moves to allow hard-up families to withdraw cash from their pension funds have won support from Bermuda Public Services Union.But BPSU president Kevin Grant, who has been demanding more help for families during the recession, urged Government to keep the union in the loop over future decisions on pensions, to protect the working man’s interests. Meanwhile Shadow Finance Minister Bob Richards said Government’s financial mismanagement means it has little choice other than to introduce measures helping people now but making life tougher for them in the future.Premier Paula Cox has tabled amendments to the National Pension Scheme (Financial Hardship) Regulations to allow people facing eviction for not paying their rent to withdraw cash from their pensions.The maximum refund will be 20 percent of the account balance on the application date; each person will be limited to one application in a five-year period and two applications in their lifetime.Yesterday, Mr Grant said such restrictions give him comfort that people will still have something left in their pensions, explaining: “With these policies in place I think that this initiative is more positive than negative.“It allows people to withdraw funds to take care of needs as opposed to wants. They are not allowed to withdraw everything so they will have something left and the financial impact relates only to their own private plan and not their social insurance.“I will say this though, the BPSU are quite eager to have discussions on pension plans that our members are involved in. “It is imperative that we as a union keep abreast of the condition of these plans to make sure that they are maintained to a certain degree that will allow beneficiaries their just reward.”Mr Richards said: “The unfortunate thing is that you have to make a choice between the lesser of two evils.“One is having people evicted from their homes because they can’t pay their rent; the other is people having to rob from their future lifelines.“The immediacy of being evicted trumps the needs people will face when they are older, but it doesn’t mean that taking money from people’s pensions is a good thing. If the Government had more of its own wherewithal to help these folks it would be a good thing. If budgets had been better managed they might have been able to help these folks.”The National Pension Scheme (Financial Hardship) Regulations were passed last year to allow those at risk of losing their property due to mortgage arrears, or those unable to pay school or medical fees, to withdraw from their pensions.Explaining why those behind in their rent would now be included, Ms Cox said in a statement: “It is important to continue to help people through one of the most challenging economic downturns in our lifetime and these regulations will provide temporary assistance to persons by allowing them to gain access to their private sector pension funds if they are faced with the threat of eviction from their home due to rental arrears.”Mr Richards said that approach confirms Bermuda is not recovering from the recession, as Ms Cox had previously indicated. “Maybe the US are in recovery, but we are not,” he said.