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.
BENEFITS UNDER THE FEDERATED PENSION FUND
On attainment of age 60, the employer submits a completed benefit from on behalf of the retiring member. The benefits 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. No periodic pension is paid.
VOLUNTARY RETIREMENT BENEFITS
Members who wish to retire prematurely for immediate benefit may do so at age 45 and must have completed a minimum pensionable services period of ten years.
– With at least ten years scheme membership, the retiring member receives a gratuity and a periodic pension.
RETIREMENT ON GROUNDS OF ILL HEALTH
A member may prematurely be retired on grounds of ill health and disability. However such retirement must be advised by a medical authority. Upon the advice of a medical authority, a member is paid benefits relating to ill health. The benefits payable is proportional to the degree of disability suffered by the member.
When a member institution of the pension scheme is obliged to down –size its workforce or close operations entirely, some or all its staff are laid redundant. Staff who may be laid off in such an exercise will be paid redundancy benefits. Laid off members who have completed ten years pensionable service will be paid a gratuity and periodic pensions. Those with less than ten years scheme membership will be paid a lump sum.
When a member dies whilst in active service, a survivor’s benefit is paid the dependants. The benefit payable is at least twice terminal annual salary of the deceased member. However, the claim must be supported by the death certificate of the deceased member.
THE PENSION BENEFIT COMPUTATION FORMULA
The benefit computation formula for the pension scheme is as follows: 1/600* completed months of service * terminal salary including fixed allowances.
For the purpose of benefit computation the scheme recognizes a maximum of 400 months service.
The full pension enjoyed by a retired member is not more than that 2/3 of the salary.
TYPES OF PENSION
FULL ANNUAL PENSION
This is the pension when no portion is exchanged for a lump sum or gratuity. The pensioner receives the maximum pension periodically because he did not exchange any portion of it in the form of gratuity or lump sum.
REDUCED PENSION AND GRATUITY
An initial gratuity is paid and then an annual reduced pension. The full pension is reduced by the portion of the gratuity initially paid. The gratuity is the product of commutation of 25% of the pension or one year’s final salary, whichever is greater. The reduced pension is the rest of the value of the portion of the full pension which is not commuted (75%), payable annually but may be drawn at a more frequent period.
This is the retirement gratuity in the form of a single cash payment in full and final settlement of the benefits claimed. This benefit is payable to retiring members who have less than ten years scheme membership.
AGE IN RELATION TO LEVEL OF BENEFITS AT RETIREMENT
The pension scheme is over and above other considerations an old age scheme guaranteeing some source of income to the member in old age. Retiring at the normal retirement age, a member enjoys maximum benefit. A premature of years by which the member retires earlier.
A member, who has completed not less than five year’s scheme membership but has not reached the age of 45 and wants to retire on his free will, can only be paid his benefits upon attainment of age 45 and on condition that he has completed five years scheme membership.
FORFEITURE OF BENEFITS
When a member is dismissed from service or his service terminated on account of negligence, irregularity or misconduct, he forfeits the benefits.
When a member resigns from the job, he forfeits the benefits
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.
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.
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 admission to the scheme, if such interval exists, the employer will be required to purchase the rights of backdating membership by making back-service contribution 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
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.
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 in both instances the employer continues to pay contribution regularly on the member’s behalf.
INJURIES COMPENSATION PROCEDURES
WORKER’S/SUPERVISOR’S ROLE IN THE PROCESS
When a claim is required, the injured worker on his supervisor reports the accident to the employer within one month. The Act does not, however, stop any injured workmen from reporting an injury directly to the commissioner’s official within the specified time frame.
THE EMPLOYER’S ROLE
The employer also makes arrangements for medical treatment and obtains the final medical report. He also provides the statement of worker’s earning for the twelve (12) months preceding the accident and reports the accident to the commissioner of injuries.
THE LABOUR DEPARTMENT’S ROLE
The commissioner of injuries ensures that his office makes an initial investigation into the reported accident, determines the legitimacy of the claim for compensation and subsequently refers claim to SSHFC with all relevant documentation for settlement.
THE ROLE OF THE MEDICAL AUTHORITY
The medical Authority provides treatment to the injured worker conducts medical examinations and determines the schedule to the Act which becomes basis for determination of the compensation due.
THE ROLE OF SSHFC IN THE PROCESS
Upon receipt of a claim file from the office of the commissioner of injuries, the SSHF as trustees of the fund verifies the claim to establish validity of claim, pays injured workmen or his/her survivors the compensation due.
TYPES AND LEVELS OF COMPENSATION
Compensation is paid in respect of:
– Death/fatal accident
– Permanent Total Incapacity
– Constant attendance allowance
– Temporary incapacity (total/partial)
Where death occurs as a result of an accident or occupational disease 120 months of the deceased member’s earnings, as defined in the Act is paid to beneficiaries subject to maximum earning of D1500 per month or D100, 000 whichever is greater.
PERMANENT TOTAL INCAPACITY
If the injury permanently and totally incapacitates a worker then he will enjoy 60% of his/her earning as monthly pension subject to a maximum earning of D1500 per monthly. In any case minimum monthly pension is D100.00.
CONTANT ATTENDANCE ALLOWANCE
If the injured worker needs somebody to attend to him/her then 25% of pension is payable in addition to the monthly pension.
PERMANENT PARTIAL INCAPACITY
The same rate applies as in the case of permanent Total Incapacity:
With incapacity of 20% or more a periodic pension is guaranteed for life.
With incapacity less than 20% a single lump sum payment is made.
In case of temporary incapacity compensation is paid for a period of 6 months.
With total temporary incapacity60% of earnings are paid for a period of 6 months.
With partial temporary incapacity and injured worker receives 60% of difference between pre-accident and post-accident wage of worker or wage determined by the commissioner of injuries whichever is greater.
MEDICAL CHARGES/COST OF MEDICAL TREATMENT
The reasonable medical costs as a result of injury caused by an accident arising out of and in the cause of employment shall be met jointly by the employer (25%) and the injuries compensation fund (75%) or D10,000 whichever less. In the case of an evacuation the approval of the Director of Medical and Health Services must be obtained.
DAMAGES AWARDED BY THE COURTS
When the injury for which compensation is payable under the Act, the circumstances of which make the employer legally liable, such that the workman may recover damages in an action at law, such workman may regardless of the injuries compensation Act pursue and recover damages from the courts.
However, recovery of damages from the courts is a bar to payment of compensation under this Act unless and until fifty percent (50%) of the amount of such damages is paid by the court or by the workman or some person acting on behalf of the injured workman to the injuries compensation fund.
When a claim is received for damages by any court, that court shall notify the commissioner of such claim.
Within 14 days of receipt of such notification the commissioner shall if satisfied that compensation under this Act is being paid to the claimant, notify the court of the court of law of that fact.
Where a court is in receipt of notification by the commissioner and subsequently makes an award of damages in respect of the claim to which such notification relates, the courts shall order the person liable to pay such damages, to pay 50% of such damages to the claimant and 50%to the injuries compensation fund.