• Social Security & Housing Finance Corporation
  • 61 Ecowas Ave, Banjul
  • (+220) 422-2271

Federated Pension Scheme

Federated Pension Scheme (FPS)

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.

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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:

  1. Civil Servants working for the government are under a separate pension run by the government under the Pension Act 1950 (cap.137).
  2. Private Sector organisations who are not prepared to bear the full responsibility of paying for membership contributions for their employees
  3. Workers below the age of 18 years.
  4. Casual Employees that work on a piece-meal basis whether on daily basis or are employed on a fixed term contract not exceeding one-month duration.

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

  1. Forfeiture of benefits
    • When a member is dismissed or his/her service is terminated on account of negligence, irregularity or misconduct, he/she forfeits his/her benefits.
    • When a member resigns from the job to avoid dismissal, he/she 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.
  2. Intra-scheme transfer

    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.

  3. Back-service rights

    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.

  4. Temporary absence from employment

    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.

Regulatory Framework:

Earlier Acts of Parliament - The SSHFC Act 1981 and The SSHFC Act 2010.

Current Act of Parliament - The SSHFC Act 2015.

Overview of FPS

  1. Qualifying conditions

    To qualify for the Federated Pensions Scheme members must be full time employees of eligible or registerable organisations such as:

    • Quasi/Semi government organisations
    • Private Sector organisations who are ready to cover the entire cost of their employees’ member contributions

    A visit will be conducted by a SSHFC Compliance Inspector to eligible or registrable organisations to explain the benefits and workings of the FPS.

  1. Registration form

    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:

    • A passport size photograph;
    • A copy of a valid proof of identification (a Birth Certificate, National Identification Card or an Alkalo’s Attestation)
  1. Deadline

    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.

  2. Calculations

    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).

  3. Remittance schedule

    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

  4. Late payment

    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:

  1. Normal retirement - this is when a member of the scheme reaches the official retirement age of 60 years in their work place.
  2. Voluntary retirement – this is when a member of the scheme chooses to retire at 45 years of age, before the official retirement age. This is only possible if the member has been with the scheme for at least 5 years/60 months (i.e. pensionable service period)
  3. Retirement on the Grounds of Ill-Health - this is when a member is forced to retire prematurely on the grounds of ill-health or disability. Such retirement must be advice by a medical authority.
  4. Retirement on the grounds of marriage - Female members of the scheme who are married should they wish to retire on marriage grounds can do so if they provide evidence of marriage by submitting a marriage certificate.
  5. Redundancy – this is where a member institution is liquidated and so lays off their staff. Redundancy benefits will be paid out to the affected scheme member.
  6. Death - this is where a member of the scheme dies a Survivors Benefit will be paid out to their nominees. The claim must be accompanied by:
    • A letter of claim by the nominee(s).
    • Evidence of the death of the member – a death certificate or a document from the Chief of the area where the deceased was buried.
    • Photographs and birth certificates of all who have a legitimate claim to the estate of the deceased.

The benefit payment for each event is as follows:

  1. Normal retirement benefit - if scheme membership is:
    • 10 years or more, then the retiring member is entitled to a monthly pension for the rest of his/her life. However, part of the pension entitlement could be converted into a gratuity.
    • Less than 10 years but at least 5 years, then the retiring member is entitled to a single lump sum payment equal to 5 x the full pension entitlement
    • Withdrawal Benefits- This is where a scheme member chooses voluntary retirement the payment is as follows:
    • An individual whose length of service is 10 years and above are entitled to Gratuity and a life time periodic/monthly pension.
    • An individual whose length of service/scheme membership is less than 10 years qualifies for a single lumpsum payment/gratuity.
  2. Invalidity Benefit - This is when a member retires on the grounds of Ill-Health. The Benefits paid are as follows:
    • An individual whose length of service is 10 years and above are entitled to Gratuity and a life time periodic/monthly pension.
    • An individual whose length of service/scheme membership is less than 10 years qualifies for a single lumpsum payment/gratuity.
  3. Optional Withdrawal Benefit (on the grounds of marriage) - When a female member retires on marriage grounds, she is paid immediately a one-off settlement in the form of a lumpsum without any monthly pension.
  4. Optional Withdrawal Benefit (on the grounds of redundancy) – If the employee who was made redundant has been a member of the scheme for at least 10 years then they will be entitled to a gratuity payment and monthly pension. If however their membership is less than 10 years they will be entitled to a single lump payment.
  5. Survivor’s Benefit - The survivors will be entitled to a tax-free lump sum equivalent of 2 years of the deceased’s gross salary. The benefit qualifying condition is that a person must have been a member of the scheme at least 5 years to qualify for benefits. A member with less than 5 years membership of the scheme, who chooses to retire before the statutory retirement age would forfeit his/her benefits unless under circumstances of retrenchment or redundancy.

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.