Wednesday, February 2, 2011

Senior Public Relations Manager ponder Over National Provident, Federated Pension Funds

At a one day-long sensitization workshop organised by the Social Security and Housing Finance Corporation (SSHFC) on the 27th January 2011 at the SSHFC conference hall in Banjul, The senior public relations manager of SSHFC gave are background information on the National Provident and Federated Pension Fund.
In a power point presentation, Mr. Raymond Njai, senior public relations manage who presented on the on the The National Provident Fund (NPF), said purposely, the fund is to provide some measures as a result of specified contingencies: old age, premature retirement, retirement on grounds of marriage (female only), invalidity, death and now redundancy. 
On application of who the SSHFC Act 1981 applies for the NPF, Njai revealed that the following: 1. Any employer whose business is required to be registered under the Business Registration Act 1973;
2. Any employer not specifically exempted from the provisions of the SSHFC Act;
3. Any employer and employee to whom before the coming into force of this, the State Pension Board Act applied;
4. Citizens of the Gambia employed by Diplomatic Missions or International Institutions of equivalent status, and
5. Any employee (irrespective of nationality) of not less than 18 years of age employed in an establishment whichh is registratble under the Business Registration Act 1973. How can employees register, accordingly, the registration of employees is done on a prescribed registration form. However, employees are required to give full and accurate information about themselves on the following among other things:- Full name, Permanent address, Correct date of birth, Exact employment salary, Marital satus, Date employment commenced, Date of admission into Scheme, Employee nominees and Signatures of employee and employer. 
   In addition, employees must submit along with the completed registration form, two recent identical passport size photos and a genuine documentary evidence of birth: either a birth certificate, an attestation by village head endorsed by the District Chief or a National Identity Card. According to Njai,voluntary registration can also be done for any employer or employee to whom the Corporation Act does not apply, may voluntarily register with the fund. "Members registered voluntarily declare their level of contribution based on their earnings. "Once registered, all laws and regulations bind such members." 
 He emphasized that Dual membership is
when an employee is currently employed by two or more different establishments, each shall pay to the SSHFC an amount equal to 15 percent of the salary or wages such employer pays to the employee. On exemption, Mr. Njai said the SSHFC Act does not appy to the following: 
1.Civil Servants to whom the Pensions Act 1950 (Cap. 137) applies;
2. Workers below the age of 18 years of age;
Workers above the age of 59;
3. Casual employees on a daily basis on piece-meal work alone and employed on a fixed term contract not exceeding one month duration; and
4. Any other category of employees which the Managing Director shall determine to be casual employees. According to him, it is important to note that the savings in the NPF are for retirement purposes above other considerations. However, there are contigencies that allow members to get part if not all their money. 
  He further explained that the Normal Retirement benefit is at the retirement age of 60 years when, a claiment receives lump-sum made up of: the 10 percent contribution of the employer, the 5 percent contribution of the employee, plus very generous interest rate based on the average rate of returns on investments. 
  Under the NPF, he went on to say that all benefits are paid in one final payment so that there is nothing like a regular pension. However at the request of the claimant, part of the lump sum may be converted in an annuity, receivable periodically. For one to qualify for the Withdraw benefit, a member must :has attained the age of 45 years and be out of employment for at least two years and he/she must has at least five years scheme membership.
  In addition, members who have not attained the retirement age but wish to prematurely retire from work can do so at the age of 45 or thereafter. However, there is a cooling-off period which depends on the age of the member at the time of retiring.
 On the Federated Pension Fund (FPD) Njai said that the scheme was created to providesocial security protection to workers in the quasi-government organisations. He recalled that the founding members institutins initially ran their individual schemes until 1973 when they were federated and administered by SSHFC. 
  According to Njai, the pension fund is one of the constituent funds of the corporation adding that it is a final pay scheme in the sense that it pays benefits based on age, length of qualifying services and final salary as at the date of retirement from services or on the date of death of the member, he stated. On membership and registration, Njai disclosed that employees in full time employment in an organisation registered and as a member institution of the Pension Scheme qualify for membership of the scheme, while stating that parastal organisations established by Acts of parliament form the bulk of the pension scheme.
  However, Njai went on, employees in the private sector whose employer’s so desire may opt for membership in the Pension Scheme.
These, he noted, employees are required to complete prescribed registration forms submitting complete and accurate information about them, defining that Particular attention should be paid to details regarding: name, date of birth, date employed/admitted into the scheme and annual salary including fixed allowances. 
Upon completion of the above, the completed application form must be supported by a birth certificate or national identification card and passport size photographs for submission at SSHFC office.
 About exemptions, he revealed that the following categories are exempted from the schemecivil servants to whom the Pensions Act 1950 (Cap.137) applies, workers below the age of 18 years, casual employees on a daily basis upon piece-meal work alone and employed on a fixed term contract not exceeding one month duration; and any other category of employees which the Managing Director in his discretion shall determine to be casual employees. 
Explaining how the scheme is funded, Njai said scheme is funded from contributions at a rate determine but was quick to say that the rate is a proportion of the member’s basic salary and fixed allowances."The current rate is 19%. "The employer is liable to make the entire contributions on behalf of the employees.
According to him, the retirement age is now revised from 55 to 60 years pointing out that the revision came about in April 2004.
He further explained that benefits after normal retirement, that is the attainment of age 60, the employer submits a completed benefits form to the corporation on behalf of the retiring member. 
The benefits, he went on are computed and paid as follows:with at least ten years scheme membership, the retiring member receives a gratuity and is also paid a periodic pension, with less than ten years scheme membership, the retiring member receives a lump sum payment, and "no periodic pension is paid," he disclosed.
Other types benefits, he said are the voluntary retirement, retirement on grounds of ill health, redundancy and survivors. Njai lectured that forfeiture of benefits are when a member is dismissed from service or his services terminated on account of negligence, irregularity or misconduct, he forfeits the benefits, when a member resigns from the job, he forfeits the benefits, and when a member completes less than five years service and leaves the job on grounds other than ill-health, disability or death, he forfeits the benefits. For the Intra- Scheme Transfer, in its simply term, is when a member may transfer from one member institution to another without the member losing the benefits already secured whilst he was in the service of the previous employer. However, the previous employer must give written approval for the transfer to take effect. And for the Back- Service Rights is when an employer agrees to backdate an employee’s pensionable service which will give the employee benefits secured for the period between his date of employment and his date of formal admission to the scheme, if such interval exists, the employer will be required to purchase the rights of backdating membership by making back-service contributions to the Fund, calculated on the basis of the employee’s  salary per annum, the months of the intervening period, and a back service factor dependant on age of member at the point of calculation. Temporary Absence from employment, when a member who is absent from his employment as a result of authorized leave of absence or on the grounds of ill-health verified by an officially recognized medical practitioner, or on study leave with pay shall continue to be a member.
Again, a member who is on secondment to another employment or on study leave without pay shall continue to be a member at the discretion of the employer, provided that in both instances the employer continues to pay contributions regularly on the member’s behalf. For the Deferred Pension is when a member, who has completed not less than five years’ scheme membership but has not reached the age of 45 and wants to retire on his own free will, can only be paid his benefits upon attainment of age 45 and on condition that he has completed five years scheme membership.

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