New Laws Regulating Pension Plans Coming
The Government has given notice for legislation to regulate the administration of occupational pension schemes in The Bahamas and for connected purposes.
The proposed Employees Pension Fund Protection Act has been tabled in the House of Assembly by Prime Minister Perry G. Christie.
It seeks to provide for the regulation of pension plans that cover persons employed in the private sector.
The Bill seeks to establish the Pension Commission of The Bahamas, a body corporate with perpetual succession and a common seal.
It shall have powers to enter into contracts, sue and be sued.
Appointed by the Governor General, the members of the Commission are to consist of the chairman, deputy chairman and not less than three and not more than seven other members. The Financial Secretary is an ex officio member.
The Commission is to administer the Act; consider and determine applications for the registration of approved superannuation funds and approved retirement schemes; and promote and ensure compliance by pension plans with the provisions of the Act.
It is to also monitor the administration and funding of pension plans and to enforce the provisions of the Act; approve the payment of benefit under pension plans; promote public education on pension plans and their benefits; and advise the Minister.
According to the Bill, the Minister with responsibility for pensions may give to the Commission “such directions…as to the discharge of its functions as appears to the Minister to be requisite in the public interest and the Commission shall give effect to any such directions.”
Subject to the provisions of the proposed Employees Pension Fund Protection Act, no person shall establish, operate or manage a pension plan or fund unless that plan or fund is registered under the Act.
If, immediately before the commencement of the Act, there is in existence a pension plan or fund, it may, subject to the Act, continue to operate.
A pension plan will not be eligible for registration unless it is administered by an administrator who is registered with the Commission.
The Commission may refuse to register a pension plan that does not comply with the Act; or cancel the registration of a pension plan if at any time after registration the plan does not comply or is not administered in accordance with the Act.
The Commission may also refuse to register an amendment to a pension plan if the amendment or the pension plan as sought to be amended would result in the pension plan ceasing to comply with the Act.
A pension plan shall not be eligible for registration unless it provides for sufficient funding on the date of its registration or on some other future date as may be determined by the Commission.
Normal retirement age is being set at 65 years unless a pension plan specifies an earlier date. Provision is made for early retirement.
If a member dies before payment of his pension is due to commence, his beneficiary shall receive a lump sum payment subject to the provisions of the Act.
Gender discrimination in the membership of plans and the computation of benefits is prohibited.
The Act will not apply to any plan which is funded by monies paid out of the Consolidated Fund, any plan of a public corporation, or any pension plan administered by the National Insurance Board.
By Gladstone Thurston
Bahamas Information Services