Are you wondering what is the meaning of the new provident fund deduction that is appearing on your payslip? well. The provident fund in your payslip is public service superannuation scheme. It is a deduction for pension for civil servants, teachers, disciplined forces and judges except the Chief Justice and the Deputy Chif Justice.
For men the 2% deduction for this scheme has been taken care of by the Widows and Children’s Pension Scheme (WCPS) that has been stopped.
The deduction will gradually be raised up to 7.5%. The government will provide another 7.5% to make it 15%.
To make the burden lighter for employees, they will contribute only 2% of their basic pay in the first year (2021). In 2022 (the second year), teachers will contribute 5% of their basic pay while the full 7.5% deduction will be effected as from the third year (2023).
Under this scheme, if you quit your current job and join another field, your accrued pension will be transferred to that field.
The scheme will be mandatory for all employees aged below 45 years. On the other hand, the current Public Service Pension arrangement will be closed to all new employees and all serving employees who will be aged below 45 years as at 1st January, 2021. Employees aged 45 years and above as at that date will be given an option to join the new Scheme or remain in the old Scheme.
Read all the details on this scheme here; Government now rolls out the Provident Fund deduction.
