The Act primarily restricts refunds of required contributions and related earnings. Voluntary contributions can be refunded in accordance with the pension plan rules.
However, the Act does permit the following refunds:
Financial Hardship Refunds (see specific type of applications below)
Private employee plan applications (link to list of different type of applications)
Government employee plan applications (link to list of different type of applications)
A member or former member of a pension plan or local retirement product may apply to the Commission to cover –
- eligible medical expenses;
- mortgage arrears or other debt payments secured on the applicant’s principal residence, the non-payment of which has resulted in the threat of loss of the principal residence;
- rental arrears on the applicant’s home, the non- payment of which has resulted in the imminent threat of the applicant’s eviction from the home;
- eligible educational expenses; or
- eligible funeral expenses (for private plans only)
If approved, (subject to a minimum payment of $1,000) an applicant can have up to 20% of their pension fund account balance paid to the entity or person to whom the amounts are owed. An applicant can have up to two applications approved during their lifetime and the Commission cannot approve an application within five years of the date on which a previous application by the applicant was approved.
If an application is approved, the Commission sends a notification to the applicant’s pension plan or local retirement product administrator of the amount to be refunded and directions on making the payment. The administrator has a duty to make the payment within fifteen working days of receiving the Commission’s notification.
Government employees or other public officers that are Members of the Public Service Superannuation Fund may also make similar applications to the Commission for financial hardship refunds for up to 25% of their pension contributions plus interest (subject to a minimum payment of $1,000).
Lump Sum Refunds (see individual Commission application here for specific details)
A member or former member of a defined contribution pension plan or local retirement product that has attained the normal retirement age of 65 may apply to the Commission for up to 25% of their vested account balance. An applicant may only be approved once for a refund (from one or more accounts) and if approved, their plan administrator will be notified by the Commission accordingly. The plan administrator is required to make the payment of the refund to the applicant within twenty working days of receipt of the direction (approval) issued by the Commission.
Small Pension Refunds (see your individual plan administrator for specific application)
A member or former member of a pension plan or local retirement product that has attained the normal retirement age of 65 may receive the value of their account balance in a lump sum, if their account balance is not more than $50,000 or the entire value of the commuted value of their benefits, if not more than $50,000.
However, this refund is not available to a member or former member of a multi-employer pension plan.
Life Reducing Disability Refunds (see your individual plan administrator for specific application)
A pension plan or local retirement product may permit variation (including a lump sum refund) in terms of payment of a pension or other benefit to a member or former member by reason of them having a mental or physical disability which, in the opinion of a qualified medical practitioner, is likely to reduce their life expectancy to five years or less.
Temporary Pension Refunds (see your individual plan administrator for specific details)
There are occasions when the Government of Bermuda will permit members or former members of pension plans and local retirement products to apply for temporary refunds (e.g. Covid-19 related relief). These refunds are normally for a specific amount and for a fixed period of time.