April 15th, 2017
Purpose: Mandatory national occupational pension system
General Description: Our Federated Pension Scheme guarantees our members regular monthly income on retirement up to the time of death, based on your final salary at the time of retirement.
Type of scheme: It is a final pay or defined benefit scheme in view of the fact that benefit payments are based on a defined formula which take into account factors such as age, salary at the point of termination and length of service.
Who is eligible to be covered? Full time employees of a registerable organisation recognised as a member institution who are aged between 18 to 60 years.
Who are registerable organisations for the FPS? Registerable organisations under the FPS are public or quasi government institutions also known as parastatals. Additionally, the law also permits employers of private institutions who are prepared to take up the sole responsibility of paying full member contributions in order to register their full-time employees under this scheme.
Who is Disqualified? The following categories of persons are disqualified from participating in this scheme:
Who pays the contribution and how much? Under the FPS, employers are required to pay the entire contribution each month on behalf of their employees. At present SSHFC management have set the contribution rate at 15% of Gross Salary (i.e. basic salary plus all other fixed allowances).
What benefits are paid out and how? For most members their concern is when and how to access their contributions. It is important to note that the contributions in the Federated Pension Scheme are for retirement purposes above other considerations. However apart from the normal retirement, there are contingencies that allow members to get paid a part of their pension in the event of a premature termination of service due to ill health, redundancy or on the grounds of marriage for female members of the scheme or a member chooses early retirement.
Key additional information
A member may transfer from one member institution to another without the member losing the benefits already secured whilst he/she 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 employees pensionable service which will give the employee benefits secured for the period between his/her date of employment and his/her 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 employees Gross Salary per annum, the months of the intervening period, and a back service factor is dependent on age of member at the point of calculation.
A member who is absent from his/her 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 of the Scheme. Furthermore, a member who is on secondment to another employment or on study leave without pay shall continue to be a member of the Scheme provided in both instances the employer continues to pay contribution regularly on the members behalf.
Who is responsible for the Administration of the FPS? SSHFC is the sole administrator of the Federated Pension Scheme.
Earlier Acts of Parliament - The SSHFC Act 1981 and The SSHFC Act 2010.
Current Act of Parliament - The SSHFC Act 2015.
To qualify for the Federated Pensions Scheme members must be full time employees of eligible or registerable organisations such as:
A visit will be conducted by a SSHFC Compliance Inspector to eligible or registrable organisations to explain the benefits and workings of the FPS.
The employees of member institutions are required to complete the SSHFC registration form, SS1 (Click here for the form). The completed form must be endorsed by the employer. Your full name, date of birth, date of employment, job title, current gross and annual salary, marital status, gender and previous employers MUST be stated clearly in the registration form. In addition, the following key documentation must also be submitted with the completed form:
Member institutions as employer shall remit to the social security fund, all contributions due for all their employees registered in this scheme, not later that the 15th day of the month following that in which the relevant salary or wages were paid.
The monthly contributions are entirely the responsibility of the employer and payments are calculated at 15% of the employees’ gross salary (i.e. basic plus all other fixed allowances combined).
The remittance schedule (NPF3 FORM) must accompany all contribution payments and employers must quote this when they pay contributions for their employees. The remittance schedule must be accurately completed giving names, salary, Social Security numbers and the amount payable for each employee
A penalty charge of 2.5 % (per cent) of the unpaid amount will be levied on the employer for the late payment of contributions for each month or part of the month such amounts remain unpaid.
The following events trigger the pay out of pension benefits:
The benefit payment for each event is as follows:
Accounts are closed following full settlement of benefit. However, they will be maintained as dormant for reference purposes until expiry of member record retention period as per policy.