How Teachers Will Benefit From Contributory Pension Scheme
TSC employed teachers are set to garner more benefits in the contributory pension scheme compared to the old government retirement benefits.
The Teachers Service Commission (TSC) had introduced a new deduction on teachers’ pay slips referred to as Provident Fund which will see teachers shelve a portion of their monthly salaries towards the new savings scheme.
The provident fund is another name for pension fund. Its main purpose is to provide TSC employees with lump sum payments at the time of exit from their place of employment.
Provident fund differs from pension funds, which have elements of both lump sum as well as monthly pension payments. The new contributory pension scheme will help teachers contribute 7.5% of their monthly basic salaries while their employer tops up with 15% of the employee’s basic salary.
Here are the main five benefits of the new contributory Pension scheme that every teachers should know.
a) Transfer of pension benefit credit
An employee can transfer pension benefit credits from a former employer to another with a similar Pension scheme.
b) Access of retirement benefits before retirement age.
The scheme allows employees to access part of their benefits even before the mandatory retirement age.
c) Transfer of past benefits to the new scheme.
Teachers joining the scheme from non-contributory pension scheme will have their past benefits transferred to the new scheme.
d) No More Deductions From NSSF and WCPS.
Widows and Children’s Pension Scheme (WCPS) and NSSF contribution will cease immediately an employee joins the scheme.
e) Those who remain in the free Pension Act will be bound by the provision of the Pensions Act cap 189.
The 7.5% deduction for the scheme from the teachers’ monthly earnings was distributed in three phases of 2.5 per cent each year.
By nest year January the last deduction will be made to su up to 7.5%.
