National Provident Fund

 

INTRODUCTION

 
Social security and Housing Finance Corporation was established by an act of Parliament in 1981. The purpose of the Fund is to provide some measure of protection for members against interruption or loss of earning power as a result of specified contingencies: Old age, premature retirement, retirement on grounds of marriage (female only), invalidity, death and now redundancy.
 
APPLICATION
 
The Social Security and Housing Corporation Act 1981 applies to:
1. Any employer whose business is required to be registered under the Business Registration act 1973;
2. Any employer not specially exempted from the provisions of the SSHFC Act;
3. Any employer and employee to whom before the coming into force of this Act, 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 which s registrable under the Business Registration Act 1973:
 

EXEMPTIONS
 
The Social Security and Housing Finance Corporation Act does not apply to the following categories of persons:
1. Civil Servants to whom the Pensions Act 1950 (Cap.137) applies;
2. Workers below the age of 18 years of age;
3. Workers above the age of 59, except on special arrangement;
4. Casual employees on a daily basis on piece – meal work alone and employed on a fixed term contract not exceeding one month duration; and
5. Any other category of employees which the Managing Director in his discretion shall determine to be casual employees.

 
REGISTRATION ON EMPLOYEES
 
The registration of employees is done on a prescribed registration form; Employees are required to give full and accurate information about themselves. Registering employees are required to provide information on the following among other things:
– Full name – Date employment commenced
– Permanent address – Date of admission into scheme
– Correct date of birth – Employee nominees
– Exact employee salary – Signature of employee and employer
– Marital status
Employees must submit along with the completed registration form, two recent identical passport –size photographs 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.
 
SUBMIT GENUINE DATE OF BIRTH
 
It is very important to submit birth documents to authenticate dates of birth so as to facilitate the processing of membership cards. Undocumented dates of birth will delay payment of benefits at time of claim as all birth dates must be documented before benefits are paid.
 
EXACT SALARY
 
It is important to state your exact salary. Contributions are based on your basis salary. Make sure your salary is correctly stated on your form to enable SSHFC determine your contributions.
 
DATE EMPLOYMENT COMMENCED
 
Registering members must state the dates on which they commence work/employment. Your membership effectively starts on that date. Do not submit an inaccurate date.
 
SIGANTURES
 
To authenticate the information on the registration form, the employer and employee are required to sign it.
 
NOMINESS OF A MEMBER
 
Dependants of a member such as children, spouses or in their absence, parents and siblings should be listed as nominees. The addresses and ages of the various nominees should be clearly inserted and apportionment of percentages to each beneficiary indicated. This list must be updated as and when circumstances change. If you need to change your list, contact SSHFC.
 
IMPORTANCE OF REGISTERING
 
Every employee to whom the SSHFC Act applies should ensure their registration with the fund. This is the sure way of securing themselves and their families and guaranteeing income after retirement, or in the event of any of the specified contingencies such as death, redundancy, ill-health, etc etc.
 
VOLUNTARY REGISTRATION
 
Any employer or employee to whom the Social Security and Housing Finance Corporation Act does not apply, may voluntarily register with the fund.
Members registered voluntarily declared their level of contribution based on their earnings. Once registered voluntarily, all the laws and regulations bind such members.
 
DUAL MEMBERSHIP
 
When an employee is concurrently employed by two or more different establishments, each shall pay the Social Security Fund an amount equal to fifteen percentum of the salary or wages such employer pays to the employee.
YOUR SOCIAL SECURITY NUMBER AND CARD
Once you register with the fund you are assigned a number. This number is the account number with SSHFC. For all your enquiries, you must quote that number to facilitate transaction with the fund. A membership card is also issued after completing he registration process i.e. filling the registration form and submitting two passport size photographs and a genuine documentary evidence of birth as mentioned above.
 
CONTRIBUTIONS
 
The contribution rate is 15% of basis salary of the employee: 5% deducted from the wages of the employee and 10% paid by the employer on behalf of the employee.
 
EMPLOYERS MUST QUOTE THIS NUMBER WHEN THEY PAY CONTRIBUTIONS FOR THE EMPLOYEES
 
The remittance schedule (NPF3 FORM) must accompany all contribution payments. These schedules must be accurately completed giving names, salary, Social Security numbers and the amount payable for each employee. With these numbers, members accounts are updated as contributions are paid in.
 
PENALTIES FOR LATE PAYMENT OF CONTRIBUTIONS
 
The employer shall remit to the social security fund, all contributions due, not later that the 15th day of the month following that in which the relevant salary or wages were paid.
A penalty charge of 5% of the unpaid amount is levied on the employer for the late payment of contributions for each month or part of the month such amounts remain unpaid.
 
TRANSFERS
 
When a member transfers from one employer to the other, it should be made known to SSHFC so that the necessary transfer is effected in the office. This will help keep track of members and prevent delay in processing their claim in due course.
 
BENEFITS UNDER THE NATIONAL PROVIDENT FUND
 
For most members their concern is when and how to access their contributions. It is important to note that the savings in the National Provident Fund are for retirement purposes above other considerations. However apart from the normal retirement, there are contingencies that allow members to get paid if not all their money.
 
THE NORMAL RETIREMENT BENEFIT
 
The normal retirement in The Gambia is at age 60. Upon reaching this age, members apply through their employers to be paid their retirement benefit.
At retirement claimant receives a lump sum made up of:
– The 10% contribution of the employer
– The 5% contribution made from your salary
– Plus a very generous interest rate based on the average rate of returns on investment

Under the national provident fund, all the benefits are paid in one-off mode, so that there is nothing like a regular pension. However at the request of the claimant part of the lump sum may be converted into an annuity, receivable periodically.
After retirement, one’s earning capacity is reduced. Therefore, the advice is to wisely invest your money to guarantee a sustained income during retirement.
 
WITHDRAWAL BENEFIT UNDER SSHFC ACT 1981
 
To qualify for the withdrawal benefit under subsection 29(4) of SSHFC Act, a member must prove to the managing Director that
– He/she has attained the age of 45 years
– He/she has been out of employment for at least two years
The whole account is payable in this type of benefit and the account would be closed.
 
WITHDRAWAL BENEFITS UNDER SOCIAL SECURITY REGULATIONS 2005
 
The withdrawal benefit is payable to a member who proves to the managing director that:
– He/she has attained the age of 45 years
– Is not in employment
Members who have not attained the normal retirement age of 60 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.
For those withdrawing between the ages of 45 and 54, 6 months cooling off period must be observed; and for those aged 55 and above, 3 months cooling off period is required provided that such retirees did not receive any benefit previously. This benefit is not payable to a member who leaves one employer for another.
The cooling off period begins from the date of submission of claim.
The withdrawal benefit paid as follows:
Age Percentage of accrual payable
45 – 54 70%
55 – 59 85%
The balance in the members account shall be payable on normal retirement or when entitlement is established under the other contingencies, subject to qualifying conditions relating to those contingencies.
The resumption of employment before the expiry of the cooling off period shall terminate entitlement to benefit.
Members who prematurely retire can re-join the scheme if they are not more than 59 years of age.
 
YOUR OPTIONAL WITHDRWAL / REDUNDANCY BENEFIT
 
The Optional Withdrawal Benefit was introduced to address the problem of the mass redundancies that ensued as a result of the economic Recovery Programme (ERP) during the early 1990’s. Members who were affected by the mass redundancies had the option to withdraw part of their savings.
The benefit is also available to members employed by companies / institutions that have been liquidated and have served a minimum of five years and female members wishing to retire on grounds of marriage.
A member whose employment is terminated on grounds of redundancy, Marriage (female members only), and compulsory retirement can be paid part of his/her benefit depending on his/her age. Such person must have completed at least 5 years scheme membership and after a cooling off period of 3 months being jobless.
This benefit is payable as detailed below.
 
AGE PERCENTAGE OF ACCURUALS PAYABLE
25 – 31 years 25%
32 – 38 years 32%
39 – 44 years 37%
45 – 54 years 50%
55 – 59 years 60%
 
A member who received optional withdrawal benefit before the start of this regulation (2005) shall qualify to withdraw the balance of his/her account after attaining the age fifty – five years, subject to satisfactory proof of unemployment for at least one year following termination of employment before the start of this regulation and the absence of intentions of re-engaging in gainful employment.
A member, who received optional withdrawal benefit before the commencement of this regulation shall be entitled to receive the balance in the account after the commencement of this regulation, provided he remains unemployed for three months following termination of employment after the age of fifty-five years and does not intent to re-engage in gainful employment.
The benefits under this regulation shall not be payable to any person leaving one employer for another.
The resumption of employment shall terminate entitlement to benefits under this regulation.
 
YOUR INVALIDITY BENEFIT
 
This benefit is payable to a member of the Fund who proves to the satisfaction of the Managing Director on the recommendation of a properly constituted Medical Board that by reason of permanent physical disability, he/she is unable to continue to engage in any gainful employment.
Where a member’s disability is total and permanent, the benefit payable shall be the full balance in his account. Where a member’s disability is partial and temporary, the initial benefit payable shall be a proportion of his or her current balance in his account. A claim for further settlement may be considered by the Managing Director if he deems it necessary, taking into account the degree of disability and the permanence of disability.
In the case of a mentally disabled, the benefit payable shall be in installment to the person in whose care the member is or to the Public Trustee.
 
YOUR SURVIVOR’S BENEFIT
 
Survivors’ benefit payable to the nominees of a deceased member and the claim must be accompanied by:
1. A letter of claim by the nominee(s).
2. Evidence of the death of the member – a death certificate or a document from the Chief of the area where the deceased was buried.
3. Photographs and birth certificates of all who have a legitimate claim on the estate of the deceased.
This benefit is usually paid to the Curator of Intestate Estate for administration of the deceased Estate.
 
WITHDRAWAL ON GROUNDS OF MARRIAGE
 
This benefit is usually paid to female members who are married or are marrying and wishing to retire. The qualifying conditions are as follows:
1. Must be out of employment
2. Must be married with a marriage certificate to prove it.
3. Must have at least five years scheme membership and three month cooling off period observed.
The conditions under the Optional Withdrawal Benefit also apply to women retiring on grounds of marriage.