The voluntary retirement age could be increased to 67 as the Bermuda Government grapples with its “underfunded” pensions plan.

David Burt told MPs the assets of the Public Service Superannuation Fund was valued at $574.1 million in March 2017, compared with $572.7 million three years previously.

During that time, the unfunded liability increased from $796.6 million to $844.3 million of unfunded liability, the Premier told the House of Assembly.

He said a number of actions had already been taken to improve the Fund’s position, including increasing contribution rates and suspending Cost of Living Adjustment increases for pensioners.

But he said: “Despite these actions, the PSSF remains underfunded and there are no simple remedies to resolve the underfunded position of the Plan.”

Mr Burt said a pension working group has proposed several changes to the pension system to ensure its long-term viability.

They include:

• Change the final average earnings definition from “the salary payable to him immediately preceding the date of his retirement” to an average of his earnings over the five years preceding his date of retirement or termination.

• Increase the age at which an unreduced pension is payable from 60 to 65 (55 to 60 for special groups).

• Apply actuarial reductions on early retirement prior to age 65 (60).

• Increasing contributions

Mr Burt said the proposed changes, and a Government proposal to increase the voluntary retirement age to 67, would be sent for actuarial review to determine if they would have the desired effect.

Those results should be brought to the House of Assembly later this year.

Mr Burt told the House of Assembly: “The Government is sensitive to the challenges facing pension plans of this nature and will take the appropriate steps to ensure the long-term viability of this plan.”

A review of the Ministers and Members of the Legislature Pension Fund, found the fund was valued at $12.5 million with $14.4 million of unfunded liability as of March 2017.

• • To read David Burt’s ministerial statements in full, click on the PDF under “Related Media”