First-time homeowners to tap into pensions
Regulations enabling residents to use a portion of their retirement fund to help buy a first home have been brought to the House of Assembly.
Jache Adams, appointed this week as the Junior Minister of Finance, said the move fulfilled a pledge from the Progressive Labour Party’s 2020 election platform.
Questioned for details by Craig Cannonier, of the One Bermuda Alliance, Mr Adams said it was expected that people aged 18 to 45 would be able to withdraw up to 30 per cent from their pension schemes, while those aged 45 to 64 could take out 15 per cent.
The National Pensions Scheme (First-time Homeowners Refund) Regulations 2024 will apply to a member or former member of a defined contribution pension plan, or “a member or policy holder of a local retirement product”.
However, it cannot be used for those on defined benefit pension plans, such as public officers, because the funds by their nature do not permit such withdrawals.
Mr Adams told MPs that, for many, buying a home could feel “out of reach, with the difficulty of meeting the down payment requirement often identified as a major barrier”.
He added: “A key feature of this initiative is that the individual can use the refund not only for their own first home but also can use the refund towards a home for their children or spouse.
“This means a parent who may not have sufficient cash flow can still assist their child in purchasing their first home.”
Mr Adams cautioned that “for those that choose to take up this opportunity, the ministry is currently working with the Pension Commission to ensure each are making an informed decision”.
Responding to queries from Jarion Richardson, the Leader of the Opposition, he said: “Any withdrawal from your current pension savings will impact your benefits as you retire — that is a risk that we recognise, that we are preparing for and that we will educate applicants prior to them making a decision”.
It came as Mr Adams tabled the National Pension Scheme (Occupational Pension) Amendment Act 2024 for debate at a later sitting of the House.
• To see the regulations and the junior minister’s statement in full, see Related Media
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