How much will the employer and the employee need to contribute under the new Pension Scheme and what happens to the contributions?

An employee contributes a percentage of his monthly emolument that is, sum of basic salary, transportation and housing allowance and the employer also contributes a percentage of the employee’s monthly emolument towards the retirement benefits of the employee.

For workers in the public and private sectors, the employee contributes a minimum of Eight percent of his monthly emolument

Employers in the public and private sectors are required to contribute a minimum of Ten percent of the Employee’s monthly emolument. An employer may however elect to bear the full burden of the scheme provided that the total contribution is not less than Eighteen percent of the Employee’s monthly emolument.

The total contribution (employee’s and employer’s) will be paid out by the employer directly to the Pension Fund Custodian (PFC) and the funds will be managed and invested by a Pension Fund Administrator (PFA) of the employee’s choice.