National Pension Scheme (Occupational Pensions) Amendment Ac

Link to law: http://www.bermudalaws.bm/Laws/Annual%20Laws/1999/Acts/National%20Pension%20Scheme%20%28Occupational%20Pensions%29%20Amendment%20Ac.pdf
Published: 1999

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National Pension Scheme (Occupational Pensions) Amendment Act 1999
NATIONAL PENSION SCHEME (OCCUPATIONAL PENSIONS)
AMENDMENT ACT 1999

1

BERMUDA
1999 : 49

NATIONAL PENSION SCHEME (OCCUPATIONAL PENSIONS)
AMENDMENT ACT 1999

[Date of Assent: 23 December 1999]

[Operative Date: 1 January 2000]

WHEREAS it is expedient to amend the National Pension Scheme
(Occupational Pensions) Act 1998 and to provide for connected matters:

Be it enacted by The Queen's Most Excellent Majesty, by and
with the advice and consent of the Senate and the House of Assembly of
Bermuda, and by the authority of the same, as follows:

Citation and commencement
1 (1) This Act, which amends the National Pension Scheme
(Occupational Pensions) Act 1998 ("the principal Act"), may be cited as
the National Pension Scheme (Occupational Pensions) Amendment Act
1999.

(2) This Act shall come into operation on such date as the
Minister of Finance may appoint by notice published in the Gazette; and
the Minister may appoint different days for the coming into operation of
different provisions of this Act.

Amends section 2 of principal Act
2 (1) For the definitions of "employee" and "employer" in section 2
of the principal Act there shall be substituted—

NATIONAL PENSION SCHEME (OCCUPATIONAL PENSIONS)
AMENDMENT ACT 1999

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" "employee" means a Bermudian or the husband or wife of a
Bermudian who is employed in Bermuda by an employer;

"employer" means a person in Bermuda who employs employees,
and includes a self-employed person;".

(2) For the definition of "pensionable earnings" in that section
there shall be substituted—

""pensionable earnings" means—

(a) in the case of an employee, any of the following
payments expressed in monetary terms and paid
(directly or indirectly) to the employee by the
employer up to a maximum of $200,000 per year—

(i) any wages, salary or leave pay;

(ii) any fee or commission;

(iii) any bonus, including payments from a
profit-sharing scheme, which exceeds ten
per cent of the employee's basic salary or
wage for the period in question;

but does not include overtime payments in respect of
hours worked in excess of 35 hours in any week,
severance payments, retirement or long-service
recognition payments or health insurance
premiums;

(b) in the case of a self-employed person, his earnings
as prescribed and calculated in accordance with the
regulations;".

(3) The definition of "spouse" in that section shall be omitted.

Amends section 3 of principal Act
3 For section 3(1) of the principal Act there shall be substituted—

"(1) This Act does not require a pension plan to be
provided in respect of—

(a) employment or service with the Government of
Bermuda; or

(b) employment or service for which a benefit
accrues under—

(i) the Public Service Superannuation Fund
established by section 10A of the Public

NATIONAL PENSION SCHEME (OCCUPATIONAL PENSIONS)
AMENDMENT ACT 1999

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Treasury (Administration and Payments)
Act 1969; or

(ii) the Ministers and Members of the
Legislature Pensions Fund established
under section 8 of the Ministers and
Members of the Legislature (Salaries and
Pensions) Act 1975.

(1A) This Act does not apply to the Pension Fund
established under section 3 of the Contributory Pensions Act
1967 and continued under section 3 of the Contributory
Pensions Act 1970."

Amends section 11 of principal Act
4 For section 11(1) of the principal Act there shall be substituted—

"(1) An amendment to a pension plan is void if the
amendment purports to reduce—

(a) the amount or the commuted value of a pension
benefit accrued under the pension plan with
respect to employment before the effective date
of the amendment;

(b) the amount or the commuted value of a pension
or deferred pension accrued under the pension
plan; or

(c) the amount or the commuted value of an
ancillary benefit for which a member or former
member has met all eligibility requirements
under the pension plan necessary to exercise the
right to receive payment of the benefit.

(1A) Subsection (1) does not apply in respect of a multi-
employer pension plan established—

(a) prior to the date on which this Act comes into
operation; and

(b) pursuant to a collective agreement,

if the obligation of the employer to contribute to the pension
fund is limited to a fixed amount as set out in the collective
agreement."

Amends section 19 of principal Act and First Schedule
5 (1) For subsection 19(1) of the principal Act there shall be
substituted—

NATIONAL PENSION SCHEME (OCCUPATIONAL PENSIONS)
AMENDMENT ACT 1999

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"(1) Subject to subsections (2) to (5)—

(a) a member of a defined contribution pension plan and
his employer shall both contribute equally to the
pension fund of the pension plan for the benefit of
that member;

(b) a member of a multi-employer pension plan,
established pursuant to a collective agreement under
which the obligation of the member's employer to
contribute is limited to a fixed amount set out in a
collective agreement, and his employer shall both
contribute equally to the pension fund of the pension
plan for the benefit of that member; and

(c) a member of a defined benefit plan and his employer
shall contribute in accordance with the provisions of
the pension plan and the regulations such amounts
as are required to fund the benefits accruing under
the pension plan,

from the date of membership in the pension plan at the rates
and dates specified in the First Schedule and thereafter at such
intervals as may be prescribed in the regulations."

(2) In the First Schedule—

(a) the following shall be inserted in the Table as the third
column—

"Annual Defined Benefit Accrual Rate

(% of final average earnings)

0.25%

0.50%

0.75%

1.00%

1.25%"; and

(b) at the end of the Table there shall be added—

"For the purposes of calculating the annual defined benefit
accrual rate of a member, "final average earnings" means—

(a) the annual average of the member's highest
consecutive 60 months of pensionable earnings
during the 120 months immediately before the date
the calculation is required; or

NATIONAL PENSION SCHEME (OCCUPATIONAL PENSIONS)
AMENDMENT ACT 1999

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(b) where he has less than 60 months of pensionable
earnings, the member's average pensionable
earnings calculated over his actual period of active
membership in the pension plan."

Amends section 22 of principal Act
6 Section 22 shall be renumbered as subsection (1) of that section,
and after that subsection there shall be inserted—

"(2) Notwithstanding subsection (1), the accrued
benefits of a member of a pension plan which is in existence
immediately prior to the date on which this Act comes into
operation, shall be fully vested on the date determined in
accordance with the provisions of the plan or by 1st January
2002, whichever is earlier."

Amends section 24 of principal Act
7 At the end of section 24 there shall be added—

"(8) A former member whose benefits have not vested
under the terms of a pension plan shall receive an amount that
is not less than—

(a) in the case of a defined contribution provision of a
pension plan, the portion of the former member's
account balance attributable to his contributions; or

(b) in the case of a defined benefit provision of a pension
plan, the former member's contributions made to the
pension plan together with interest at the prescribed
rate."

Substitutes sections 30 and 31 of principal Act
8 For sections 30 and 31 of the principal Act (survivor benefits on
death) there shall be substituted—

"Survivor benefit on death after pension commences
30 (1) If a former member dies after payment of his
pension benefit is due to commence, the benefit ("survivor
benefit") shall be paid to his beneficiary in accordance with the
form of pension benefit provided for under the terms of the
pension plan.

(2) The commuted value of the survivor benefit payable
under subsection (1) shall be not less than the aggregate of—

(a) the value of the former member's defined
contribution account balance, including

NATIONAL PENSION SCHEME (OCCUPATIONAL PENSIONS)
AMENDMENT ACT 1999

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accumulated additional voluntary contributions,
if any; and

(b) the commuted value of the former member's
defined benefit and the former member's
entitlement to excess contributions under
section 32, if any.

(3) Where no beneficiary has been appointed, or where
the beneficiary predeceases the member, the survivor benefit
shall be paid to the estate of the member.

(4) In this section "beneficiary" means the person who
has been appointed in writing by the member as his beneficiary
for the purposes of the pension plan.

Survivor benefits on death before pension commences
31 (1) If a member dies before payment of his pension is
due to commence, his beneficiary shall receive a lump sum
payment equal to the aggregate of—

(a) the value of the member's vested defined
contribution account balance, including
accumulated additional voluntary contributions,
if any; and

(b) the commuted value of the member's vested
defined benefit entitlement and the member's
entitlement to excess contributions under
section 32, if any,

unless the beneficiary elects in the form and manner determined
by the Commission to receive an immediate or deferred pension
of an actuarially equivalent value in the form provided under the
pension plan.

(2) Where no beneficiary has been appointed, or where
the beneficiary predeceases the member, the benefit described in
subsection (1) shall be paid to the estate of the member.

(3) If a member dies before completion of two years of
membership in the pension plan, his beneficiary shall receive a
lump sum payment equal to the member's contributions, if any,
plus earnings thereon.

(4) In this section "beneficiary" means the person who
has been appointed in writing by the member as his beneficiary
for the purposes of the pension plan."

NATIONAL PENSION SCHEME (OCCUPATIONAL PENSIONS)
AMENDMENT ACT 1999

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Substitutes section 33 of principal Act
9 For section 33 of the principal Act (effect of remarriage of
surviving spouse) there shall be substituted—

"Effect of remarriage of widow or widower
33 Where the beneficiary of a deceased member of a
pension plan who is receiving a pension under the plan is his
widow or her widower, the beneficiary remains entitled to such
pension notwithstanding his or her subsequent remarriage."

Substitutes section 71 and inserts section 72 into principal Act
10 For section 71 of the principal Act (which repealed the Pension
Trust Funds Act 1966 subject to certain savings) there shall be
substituted—

"Rule against perpetuities
71 The rule of law relating to perpetuities shall not apply,
and shall be deemed never to have applied, to the trusts of any
pension fund held under a pension plan registered under this
Act.

Application of Pension Trust Funds Act 1966
72 The Pension Trust Funds Act 1966 shall cease to apply
to any pension fund which relates to a pension plan registered
under this Act as from the date of the registration of the plan,
and the registration of the fund under the 1966 Act shall be
cancelled as from that date."

Consequential amendment
11 After section 1 of the Pension Trust Funds Act 1966 there shall
be inserted—

"Application where 1998 Act applies to pension plan
1A This Act shall not require the registration of any pension
fund which relates to a pension plan which must be registered
under the National Pension Scheme (Occupational Pensions) Act
1998."

Minor amendments of principal Act
12 The Schedule shall have effect to make miscellaneous minor
amendments to the principal Act.

NATIONAL PENSION SCHEME (OCCUPATIONAL PENSIONS)
AMENDMENT ACT 1999

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SCHEDULE (section 12)

MINOR AMENDMENTS

1 In this Schedule, "section" means section of the principal Act.

2 In section 2, in the definition of "financial institution", at the end
of paragraph (a) there shall be added "or the Banks and Deposit
Companies Act 1999".

3 In section 5, after the word "registration" there shall be added "of
a pension plan".

4 In section 9(j), the words "and ancillary benefits" shall be
omitted.

5 In section 16(1), for paragraphs (c) to (f) there shall be
substituted—

"(c)any other person entitled to benefits under the
pension plan;

(d) an agent authorised in writing by a person
mentioned in paragraph (a), (b) or (c);

(e) a representative of a trade union which represents
members of the pension plan;

(f) an employer who participates in the pension plan,".

6 In section 17(2), for the words "membership of" there shall be
substituted "membership in".

7 In section 18(1), for the words "by Commission" there shall be
substituted "by the Commission".

8 In section 19, subsection (9) and subsection (10)(e) shall be
omitted.

9 In section 20, for subsections (2) to (4) there shall be
substituted—

"(2) Subject to subsection (3), a member of a pension
plan shall receive the first instalment of his pension on the first
day of the month following his normal retirement date, and
subsequent instalments on the first day of each succeeding
month.

(3) A member of a pension plan who, after his normal
retirement date, continues in employment may elect to continue
accruing benefits under the pension plan, and shall receive the

NATIONAL PENSION SCHEME (OCCUPATIONAL PENSIONS)
AMENDMENT ACT 1999

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first instalment of his pension on the first day of the month
following—

(a) his actual retirement, or

(b) the date of his electing to receive his pension, rather
than continue to accrue benefits under the pension
plan,

whichever is earlier, and subsequent instalments on the first day
of each succeeding month.

(4) An election under subsection (3) shall be made in
writing, signed by the member and delivered to the administrator
of the pension plan."

10 In section 21(2), after the words "retirement pension" there shall
be added "benefit", and for the words "pension benefit" there shall be
substituted "deferred pension".

11 (1) In section 23(1), after the words "commuted value" there
shall be added "of the member's benefits".

(2) In section 23(4), for the words "value or" there shall be
substituted "value of the member's benefits or the member's".

12 (1) In section 24(6), the words "Notwithstanding subsection (1)"
shall be omitted.

(2) For section 24(7) there shall be substituted—

"(7) If a pension plan so provides, an employer may
receive an amount under a defined contribution pension plan
that is not in excess of his non-vested contributions in the
account balance of a former member."

13 In section 29, for the words "retirement benefit" there shall be
substituted "pension benefit".

14 (1) In section 32(1)(a), for the words "account balance under
defined contribution plans or the commuted value" there shall be
substituted "vested account balance under defined contribution plans or
the commuted value of the member's vested benefit".

(2) In section 32(1)(b), for the word "increased" there shall be
substituted "under a defined benefit provision increased".

(3) In section 32(3) and (4), the words "in respect" shall in each
place be omitted.

(4) In section 32(6)(b), for the word "operation" there shall be
substituted "value".

NATIONAL PENSION SCHEME (OCCUPATIONAL PENSIONS)
AMENDMENT ACT 1999

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15 For section 34 there shall be substituted—

"34 A pension plan may permit variation in the terms of
payment of a pension or other benefit under the pension plan to
a member or former member by reason of his having a mental or
physical disability which is likely to reduce considerably his life
expectancy."

16 In section 35(1), for the words "former member's commuted
value" there shall be substituted "commuted value of the former
member's benefits".

17 In section 36(2)(b), for the words "subsection (2)" there shall be
substituted "subsection (1)".

18 In section 39(3), for the word "an" there shall be substituted
"the".

19 In section 40(1), section 41(a) and section 42, for the words
"appointed to wind" there shall in each place be substituted "winding".

20 In section 44(3)—

(a) in paragraph (b), for the word "sold" there shall be
substituted "seized or sold"; and

(b) for the full-out words following section 44(3)(b) there
shall be substituted—

"the property or the proceeds of sale of the property shall not
be distributed to any person entitled thereto until the court
ordering the seizure or sale has made provision for the
payment into a pension fund of any amount payable by the
employer."

21 In section 45(2) (first place) and section 47(2), for the words
"pension benefits" there shall be substituted "benefits".