Bermuda Pension for Expats: Rules, Benefits, and Transfer Alternatives

In this Bermuda pension for expats guide, we’ll explore your options under Bermuda’s public and private pension systems, including eligibility, contribution rules, and tax treatment. You’ll also learn why UK pensions can’t be transferred directly to Bermuda, and what international alternatives are available.

Which Bermuda Pensions Are Available to Expats?

British expats working in Bermuda may contribute to the following types of local pension plans:

There are two mandatory pension schemes:

1. Contributory Pension Fund (CPF) – a public, government-managed DB. scheme
2. Occupational Pension Plan – a private DB or DC scheme arranged by your employer.

Contributory Pension Fund (CPF)

The Contributory Pension Fund (CPF) is a defined benefit plan regulated by the government of Bermuda. If you’re over 18 and working more than four hours per week in Bermuda, including as a self-employed expat, you must contribute unless exempt.

You may be exempt from contributing to CPF if:

• You earn less than $3,000 per year.
• You’re a Bermudan non-resident who has worked for less than 26 consecutive weeks in Bermuda.
• You’re a widow/widower receiving a special widow’s/widower’s benefit.
• You’re a student working during public holidays or periods of vacation.

Voluntary Contributions are permitted if you’re unemployed or living outside Bermuda.

To claim CPF pension benefits:

• You must be over 65.
• You must have made 25–50 annual contributions.
• The benefit amount is based on your contribution history.

Occupational Pension

The National Pension Schemes Act was introduced in 1998 due to the inability of the CFP to provide enough retirement income to Bermudan retirees. Effective 1 January 2000, the Act states that, besides CFP, employers must establish a private occupational pension for their employees. An occupational pension can be a DB or DC pension scheme, and both the employer and employee must contribute to it.

To qualify for an occupational pension in Bermuda, you must fulfil these three requirements:

1. You’re 23 or older.
2. You are a Bermudian or married to a Bermudian.
3. Satisfy at least one of the following employment criteria:
   • You have worked 720 or more hours per year for your employer in any calendar year before enrolling in the employer’s pension scheme.
   • You’re self-employed and earn over B$20,000 a year.

If you work for multiple employers and fulfil the mentioned requirements, you must enrol in each employer’s pension plan and make yearly contributions.

You can take your pension benefits from occupational schemes once you reach 65 – the regular retirement age in Bermuda. It’s also possible to retire up to 10 years earlier, in which case you’ll receive a lower pension amount. The eligibility requirements for early retirement depend on your employer’s plan.

While DC plans in the UK often allow tax-free pension lump sum withdrawals, in Bermuda, you can take your entire pension as a lump sum only if:

1. You reach 65 with a pension fund of $50,000 or less.
2. You have a mental or physical disability which may reduce your life expectancy to five years or less, according to a qualified medical practitioner’s opinion.

What Are the Contributory Pension Fund Contribution Rules and Rates?

When you’re enrolled in the CFP, the sum your employer must contribute to your pension plan depends on your earnings, so there’s no fixed contribution amount.

However, the weekly social insurance contribution rates you must pay to a CPF vary depending on several factors:

What Are the Occupational Pension Plan Contribution Rules and Rates?

Once enrolled in a defined contribution (DC) occupational pension plan in Bermuda:

• You and your employer must contribute 2% of pensionable earnings, increasing by 1% annually until both contribute 5% each.
• If you’re enrolled in a (DB) scheme, the government or Pension Commission may determine whether the 5% minimum applies.

The following rules apply to all occupational pension plans:

• You can make voluntary contributions to increase your pension savings.
• Your employer may choose to fund part or all of your required contributions.
• After one year of membership, you are fully vested and legally entitled to all contributions made.
• If you leave your employer:
  • Less than one year of service: You may be entitled to a refund of your contributions plus interest.
  • More than one year: You can transfer your accrued benefits to another registered pension plan.

Which Refunds Can You Claim From an Occupational Pension Plan?

In certain cases, you may be eligible to access part of your pension early or apply for a refund. These rules apply primarily to DC plans and approved local retirement products.

The following options are eligible for refunds and early access:

• Voluntary contributions: Can be withdrawn at any time.
• Pre-2000 contributions: Refundable if made before the National Pension Schemes Act came into effect.
• First-time homeownership refund:
  • Up to 30% of your account balance if you’re under 45.
  • Up to 15% if you’re aged 45 to 64.
• Financial hardship refund (up to 20%): For eligible medical, educational, funeral, or debt-related expenses. Paid directly to the institution or creditor.
• Lump sum at retirement: Up to 25% of your vested account balance can be withdrawn at age 65.
• Small pension refund: Available if your total pension value is less than $50,000 at age 65.
• Life-shortening disability refund: Available if a licensed medical professional certifies that a mental or physical disability is likely to reduce your life expectancy to fewer than five years.

How Are Expat Pensions Taxed in Bermuda?

Since there’s no income tax in Bermuda, your pension withdrawals aren’t subject to Bermudan tax. Instead of income tax, Bermuda taxes your salary at a progressive rate, but this doesn’t apply to pensions.

However, if you’re a UK tax resident or return within five years of accessing your pension you may owe UK tax on those benefits. A dual tax treaty does not currently exist between Bermuda and the UK, so tax planning is essential.

Speak with a cross-border pension specialist at Titan Wealth International to ensure your UK pension is structured tax-efficiently and fully compliant. Strategic advice now can help you minimise unnecessary tax and protect your long-term retirement income.

Do Self-Employed Expats Have To Contribute to Bermuda Pension Plans?

Yes, if you’re self-employed, you must contribute to the CPF and an occupational pension plan.

In the case of CPF, you’re eligible to make contributions if you’re older than 18 and work in Bermuda for more than four hours per week.

As for occupational pension plans, you qualify if you’re between the ages of 23 and 65 and your pensionable earnings from self-employment exceed $20,000.

Pensionable earnings refer to annual net earnings, meaning your revenue minus wages, bonuses, leave pay, and other business operation costs.

How To Apply for a Bermuda Pension Plan for Expats?

In the case of occupational pension plans, your employer will choose a DB or DC scheme and enrol you. If you’re self-employed, you must choose a scheme administrator from the approved list provided by the Bermuda Pension Commission.

When enrolling in a CFP, you must complete the application form for a contributory pension and submit it to the Department of Social Insurance. The form will ask you to provide details like your name, address, social insurance number, and the UK national insurance number.

You have to apply within 13 weeks of becoming eligible for the pension to avoid losing the benefit. The application process takes between 30 and 60 days, and incomplete applications can lead to delayed pension payments.

Can You Transfer a UK Pension to Bermuda?

You can’t transfer a UK pension directly to Bermuda—you can only make UK pension transfers to offshore pension plans approved by His Majesty’s Revenue and Customs (HMRC).

The official list of qualifying recognised overseas pension schemes (QROPS) shows the HMRC-approved schemes, but no Bermudan pension plan is listed as QROPS since they don’t comply with HMRC rules.

International SIPP: A Flexible Alternative for UK Expats in Bermuda

Although direct UK pension transfers to Bermuda aren’t allowed, many British expats choose to transfer their UK pension to an International SIPP – a UK-registered pension plan designed for expats.

There are several benefits transferring to an International SIPP for UK expats:

• Flexible retirement access from age 55 (57 from 2028).
• Multi-currency capability (e.g. GBP, USD, EUR).
• Tax-deferred growth within the pension.
• Wide investment choice, including passive funds, DFMs, and ETFs.
• Potential UK tax relief on contributions, if you have relevant UK earnings.

Considering transferring your pension? The pension transfer experts at Titan Wealth International provide tailored advice to help you select the right overseas pension structure – one that aligns with your retirement goals, residency status, and long-term financial strategy.