On 30 December 2019, Bermuda government passed the National Pension Scheme (Occupational Pensions) Amendment Act 2019 (NPS), which enhances the registration and maintenance of occupational pension plans and introduces new provisions related to foreign workers to ensure that local Bermudians are not more expensive to employ.

The NPS Amendment Act 2019 will enter into force at different stages from 30 December 2019, to 2 March 2020.

Key details

The new NPS Amendment Act 2019 amends the NPS Act 1998 on the establishment, registration, funding and maintenance of occupational pension plans. The most important changes in the NPS Amendment Act 2019 are the following.

Foreign workers

Currently, employers are required to provide an occupational pension plan only to Bermudian citizens and their spouses. Starting 2 March 2020, all employees over age 23, including foreigners, should be enrolled in registered occupational pension plans.

Time frames

Effective 30 December 2019, employers are required to apply to register an occupational pension plan 90 days (instead of 120 days) after the establishment of the act.

Employers obligations

Starting 2 March 2020, employers will also be required to keep all records related to employee payroll and pension information for a minimum period of seven years after termination of employment. In addition, employers who fail to pay the contributions they owe to the pension fund or withheld from a member’s earnings, within a 15-day period after receiving a written notice to pay, will be required to pay unpaid contributions as well as its interest (interest rate limited to 7% of the unpaid contribution per year).


On 2 March 2020, the vesting period for accrued benefits will be shortened from two years to one year. However, the pension commission has the discretion to approve a different vesting period for multi-employer pension plans.

Pensionable earnings

Effective 2 January 2020, pensionable earnings include any bonus and payment from a profit-sharing plan.

Lump sum

Retirees will be allowed to withdraw a lump sum, upon retirement, of up to 25% of their account balance for a defined contribution pension plan and up to 25% of the commuted value of their benefits for a defined benefit pension plan. The implementation date of this new provision has not been set yet.

Carve-out for American citizens

Starting on 2 March 2020, employers will no longer be required to provide a pension plan to American citizens who have a work authorization in Bermuda, so long as they participate in a pension plan qualified under section 401(k) of the United States Internal Revenue Code.

Employers who have established a section 401(k) pension plan with respect to such employees may register the plan with Bermuda Pension Commission.

Temporary contribution suspension

As of 1 January 2020, employers and employees who are not part of a Collective Bargaining Agreement (CBA) may suspend 2% of their pension contributions through the end of the year with the employee’s consent. If pension provisions fall under a CBA, the trade union must agree.  


All trustees must now be approved by the Pension Commission and trustees have six months to apply for and gain approval from the Pensions Commissions starting from 2 March 2020.


Pension plan assets must, as of 2 March 2020, be held in a separate fund by an approved trustee.


New civil penalties may be imposed on any person liable to a criminal conviction for non-compliance with the NPS. The maximum penalty amount is limited to BMD 50,000.

Next steps

Employers should review their recordkeeping processes and pension policies with their current provider and trustee to ensure compliance with the new Act within the timeline and confirm that their current Trustee plans to obtain approval by the Commission. In addition, employers should confirm how plan assets are housed and amend to a separate fund if necessary.

Employers should also review their current employee rolls to determine whether they have expatriate employees who are not US citizens with a 401(k) plan and enroll them in their current pension plan.

Employers should watch for Guidance Notes from the Commission to effect and maintain compliance with the NPS Act and Regulations.

Useful links

National Pension Scheme (Occupational Pensions) Amendment Act 2019