Deducting the instalments due: The runs takes place on the last weekend of the month. There is good news, however. If it is not, the GEPF follow up with National Treasury’s Transversal Systems. While most still link to the RPI (Retail Prices Index) measure of inflation, many schemes are switching to the lower CPI (Consumer Prices Index). Pension Terminations . According to Section 17 of the Government Employees Pension Law (GEP Law), if an employer pays its employees enhanced pension benefits that constitute an additional liability to the Fund, the employer will be held liable for the extra costs. As well as a pension based on your income and years of membership, some final salary pension schemes -- notably in the public sector -- provide lump sums linked to your length of service. Your employer must automatically enrol you into a pension scheme and make contributions to your pension if you’re eligible for automatic enrolment. Reconciliation: The amounts received are reconciled with the amounts owing. This is because pensions are simply future pay, so not joining a good pension plan is like turning down a pay rise -- every year, for life. Non contributory insurance is not subject to the deferral. Your employer must contribute the minimum amount if you earn more than: £520 a month; £120 a week; £480 over 4 weeks Electronic interaction is possible when an employer uses the National Treasury’s transversal systems, Persal or Persol, to administer its salaries. The information is available by the third week of every month for the month concerned. GEPF members are allowed to increase their pensionable service by purchasing additional service. In the public sector it is around 20%. COMPANY REG NO: 7406028 VAT NO: 945 6954 72. The information is captured on Excel spreadsheets. A typical final-salary scheme offers an 'accrual rate' of 1/60th. Contributions received are checked from the 8th day of every month to determine which contributions are outstanding for the calculation of interest on late payments. What this means is that they don't pay a penny into their pensions, as their benefits are provided solely by contributions from their employer (usually the taxpayer). While a 401(k) may offer an employer match, the onus is on the employee to contribute enough to a 401(k) to financially support themselves in retirement. How much your employer pays in (the higher its yearly contributions, the better); How much you pay in (your yearly contributions); Your investment returns over time (the higher, the better); and. Good practice is for the employer contribution to be double that of the employee. Typically, this will give you, say, three to four times your salary if you die in service. The 8% increase to overall pension contributions this year means that employers must contribute at least 3% to pension pots, and the remaining 5% has to be made up by employees. And the employer now decides to join a pension fund and will contribute 5% and the other 5% will be a … They can submit salary schedules or create a salary output file/payroll interface which uses the same file layout as the Persal data set. 2009, c. 19 allows for a deferral of 50% on normal contributions and accrued liability. When collecting additional liability claims from employers, the GEPF uses the following process: Raising the amounts payable by the employer and member: This is done every quarter, after the actuaries have calculated the amounts owing. Following up on discrepancies: This step is aimed at correcting overpayments and underpayments. It used to be final salary based, but for new people it's average salary, which I think is fair enough. Most private sector pensions have a normal retirement age of 65 for men and women. However, many employers prefer to match your contributions £1 for £1, known as 100% matching. These lump sums are a very valuable benefit and should never be overlooked when comparing schemes. The current position is that contributions to a pension fund or a non-contributory provident fund, which an employer is required to make in terms of the rules of the applicable fund in respect of its employees, do not constitute a taxable benefit under the Seventh Schedule to the Income Tax Act 58 of … Some of these employers also do not use a payroll interface or the Persal or Persol Transversal Systems, and instead use manual processes to interact with the GEPF. In some cases, accrual rates are 1/80th, so working four decades would earn you a pension worth half of your salary. In some cases, this no-strings payment could be 10% or even 15% of your before-tax salary. What's more, as these policies are written 'in trust,' they are paid to a deceased employee's beneficiaries free of all taxes. Allocating receipts: GEPF captures and allocates receipts for payments to the debtor accounts daily; however to finalise this process for a specific month, the receipts must be captured and allocated by the 10th of the next month in preparation for reconciliation. Employers in this sector typically contribute just 2.9% of the typical £29,451 salary into workers’ pensions, equivalent to £589 a year. It is now law that most employees must be enrolled into a workplace pension scheme by their employer. Since the late Nineties, occupational (workplace-based) pension schemes have been under attack as employers cut their costs. The President or Premier of a province is appointing a person whose service is not recognised as pensionable service; and/or. perhaps relying on an annual statement you receive from your employer What's the best employer pension contribution / matching you've seen? Manual contributors are employers who need to apply to GEPF’s Board of Trustees to become participating employers. So a career lasting 40 years would get you 40/60ths (two-thirds) of your final salary as your starting pension. If you're lucky, your scheme will have a lower-than-average retirement age. If you’ve voluntarily enrolled in a workplace pension. All members of the Fund contribute at a rate of 7.5% of pensionable salary. Status reports are submitted to GEPF management. Your actual pension contribution percentage is: 6.6% If your employer offers a pension, they can decide to terminate it. Obviously, this leads to lower payouts, but hardest hit are higher-paid employees and those who received strong salary increases during their careers. Allocating receipts: The GEPF captures and allocates receipts for payments to the debtor accounts daily; however, to finalise this process for a specific month the receipts must be captured and allocated by the 10th of the next month to the relevant Purchase of Service suspense account, in preparation for reconciliation. The Fund recovers these payments through a monthly instalment deduction or once-off payment. Some employers match dollar for … Tax-free employer contributions to pension funds are limited to 10% of employment income. Allocating receipts: The GEPF captures and allocates receipts for payment to the debtor accounts daily. In these schemes, just 20 years of service would earn you a guaranteed pension worth two-thirds of your final salary. The average matching contribution is 4.3% of the person's pay. In the public sector, most schemes have a normal retirement age of 60 (55 for the Armed Forces), but the Government is pushing to raise this to 65 for most of its employees. The GEPF checks that the salary information is complete and valid. By Kobus Hanekom, 24 March 2014. In theory, an employer can pay any amount of pension contribution to a registered pension scheme for their employees, regardless of their salary. Ordinarily then, after the monthly contribution has been paid over to the fund, the employer steps out of the picture and has nothing more to do with the member's pension benefit. If you put more than this into your pension, you won’t receive tax relief on any amount over the contribution limit. 2011, c. 78, Pension Reform, reduces the rate from 11.72% to 11.14%. Non-contributory, final salary pension schemes are as rare as hen's teeth these days, so if you ever get the opportunity to join one, then do so without delay. 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