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Q: How much will the employer and the employee need to contribute under the new Pension Scheme and what happens to the contributions?
A: An employee contributes a percentage of his monthly emolument (that is, sum of
basic salary, transportation and housing allowance) and the employer also contributes
a percentage of the employee’s monthly emolument towards the retirement
benefits of the employee.
For workers in the public and private sectors, the employee contributes a minimum
of seven and a half percent of his monthly emolument and Military personnel contribute
two and half percent of their monthly emolument.
Employers in the public and private sectors are required to contribute a minimum
of seven and a half percent of the Employee’s monthly emolument while the
Military as an employer, is required contribute twelve and a half percent. An
employer may however elect to bear the full burden of the scheme provided that
the total contribution is not less than fifteen percent of the Employee’s
monthly emolument.
The total contribution (employee’s and employer’s) will be paid out
by the employer directly to the Pension Fund Custodian (PFC) and the funds will
be managed and invested by a Pension Fund Administrator (PFA) of the employee’s
choice. |
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