First-time home buyers will be able to dip into their pension funds for a down payment on a mortgage after legislation was passed in the Senate in the wake of an occasionally heated debate.

The National Pension Scheme (Occupational Pensions) Amendment Act 2024 was affirmed by a 6-3 vote. Opposition senator Dwayne Robinson and Opposition Senate Leader Robin Tucker opposed it, as did independent senator Kiernan Bell.

Doug De Couto, of the One Bermuda Alliance, was absent, along with John Wight, the independent senator.

Joan Dillas-Wright, the Senate President, voted in favour, along with Progressive Labour Party senators.

The legislation was brought to the Upper House by Arianna Hodgson, the Junior Minister for Labour, Finance and Health.

The Act enables the National Pensions Scheme (First-Time Homeowners Refund) Regulations 2024.

Together, they allow first-time homeowners to access funds from their pension to put a down payment on a property.

For those under the age of 45, 30 per cent of the balance of a defined contribution pension plan or local retirement product can be used. For those aged between 46 and 64, 15 per cent of the balance may be used.

The Bill faced opposition in the House of Assembly on Friday, with four opposition MPs voting against it along with two government MPs, Curtis Dickinson and Scott Simmons.

Ms Hodgson told the Senate that a 20 per cent down payment on a $600,000 home would typically stand at $120,000, but dropped to $60,000 under the Government’s 10 per cent mortgage guarantee.

The average 35-year-old using pension funds to start on homeownership could thus expect to pay “approximately $40,000 in cash” under the scheme, she said.

Mr Robinson said the OBA had previously supported using pension funds towards personal hardship, but called the legislation “irresponsible”, noting that the previous withdrawals had not been repaid.

He added: “We in this chamber have to legislate not just for now, but for the future as well.”

Ms Bell queried how, if the legislation followed a similar scheme used by Singapore, it lacked similar “guardrails” used by the jurisdiction, such as the repayment of funds in the event the house were sold.

Lindsay Simmons, of the PLP, emphasised that the legislation merely provided options, adding: “This is a choice. It’s not for everybody — go for it if it works for you.”

John Wight, an independent senator, was off the island but provided The Royal Gazette with a statement calling the legislation “inappropriate and reckless”.

Mr Wight said legislation for emergency pension withdrawals had been passed many years ago for situations such as medical need.

He said it made “good sense”, as did withdrawals allowed during the pandemic — but added that he was “strongly opposed” to the present Bill.

“For Government to be an enabler through this legislation to assist an individual in this manner is both inappropriate and reckless.”

Ms Tucker, of the OBA, was also opposed, saying pensions had been made mandatory in 2000 for a reason. She warned of “unintended consequences”.

Kim Wilkerson, the Attorney-General, recalled how her family had been evicted from home in her childhood.

She also highlighted anecdotes of steeply rising rents in the planning department’s 2022 Housing Land Audit and Analysis.

The debate followed a similar party line to the House, with PLP senators in favour.

Owen Darrell, the Government Senate Leader, criticised Mr Robinson’s “doom and gloom” and insisted the legislation came with “plenty” of safeguards.

Ms Hodgson told the Senate the Office of the Tax Commissioner had reported 101 first-time homeowner applications in 2023.

She clarified that applicants for the pension refund who could not verify their ability to meet mortgage obligations could not get approved by the tax commissioner.

Ms Hodgson also clarified that funds would not be handed to applicants, but would be held in escrow by the lawyer acting on behalf of the property seller.