News / Public Notices

Press Release

 The National Pensions Regulatory Authority (NPRA), on Friday, 16th March, 2012, issued the following Public Notices on the Implementation of the Three-Tier Pension Scheme.

FAQ

  • 1 - Would those who are 55 years and above continue to contribute 17.5% or 18.5%?

    Contributors who are 55 years and above who opted to join the new scheme in its implementation will have to contribute 18.5%.  Those still on the old scheme will continue to contribute at 17.5%.

     

  • 2 - Those who are due for pension this year, would they fall under the new scheme or the old scheme?

    Those who are due for pension are presumed to be above age 55, and would therefore remain under the old scheme and receive both their lump sum and monthly pension from SSNIT.

  • 3 - Who would be the trustees under the new pension scheme, would the current trustees change or not?

    The current trustees will have to conform and comply to the standards set in the law.

  • 4 - How is the Authority going to ensure that SSNIT expenses are not as high as presented to the public?

    Under Section 55 (1) of the Pensions Act, the administrative expenses of SSNIT would be subject to a maximum limit.  The Authority would effectively monitor SSNIT  to ensure that its expenses are within the prescribed limit.

  • 5 - What are the criteria for choosing a fund manager?

    The Fund Manager should be licensed by SEC (Securities and Exchange Commission) and registered by the Authority.

  • 6 - How would the Authority asses the performance of a fund manager?

    The National Pensions Regulatory Authority (NPRA) would set its benchmark for assessing a Pension Fund Manager.

  • 7 - What is the implication; should a worker use his/her 2nd tier contribution to secure mortgage and dies after 3 years?

    The person would have taken a Life Insurance cover to secure the mortgage and this should leave untouched his benefits for his/her survivors.

  • 8 - Is the 4 years enough for the Unification of the pensions schemes in the country?

    Yes.  Work on this will begin immediately.

  • 9 - Would a pensioner who lives more than 75 years still be paid a monthly pension and how much?

    Yes.  He/she would be paid a monthly pension at the same level as he/she was receiving at age 75 and indexed annually according to the law till he/she dies.

  • 10 - What would happen to funds which are privately managed should there be a credit crunch?

    The National Pensions Regulatory Authority (NPRA), by regulations and guidelines would put in place preemptive measures to protect the contributor’s funds to avoid loss.  However, approved trustees would have the fiducial responsibility to ensure that investments are diversified  and within the permitted investment.

  • 11 - If a worker makes the minimum time contribution of 180 months (15 years) under the new scheme and dies, would SSNIT pay the survivors benefits?

    The beneficiaries will receive a onetime lump sum benefit from the Social Security and National Insurance Trust (SSNIT) in addition to any benefit accrued under the 2-tier mandatory occupational scheme.

  • 12 - What would happen to a worker who attains age 55 at 2010 and decides to join the scheme?

    If you join the new scheme the rules and regulations of the scheme applies to you automatically.  The lump sum would be paid from the occupational scheme and only your monthly pension from SSNIT compared to the former arrangement where you would have received both lump sum and monthly pension from SSNIT.

  • 13 - How would you determine the lump sum and the monthly pensions of workers who are above 45 years and have all their contributions in the 2nd tier?

    Under Section 63 (9) of the Pensions Act, a portion of the accrued benefits (comprising total contribution and returns on investments) would be used to purchase an annuity for life (the same as pensions) to provide monthly pensions.

  • 14 - What would happen to some one who retires at the age of 45 years under the new pension scheme?

    Under the new pension scheme you cannot retire at age forty-five ( 45).  You can take an early retirement at age fifty-five (55).  However, under the 2-tier mandatory scheme, you can claim your accrued benefit at fifty (50) if you are unemployed.

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