Your Obligations

Once the Trustee appointment is properly made, and effective governance structures are in place, the employer is required to meet the following obligations under the law.

Pay monthly contributions

The Act mandates employers to calculate employees’ pensionable salaries correctly and pay the corresponding mandatory contributions within fourteen days from the end of the month for which the salary was paid. Failure to deduct the correct amount and make the contribution within the fourteen day window will result in a penalty of 3% per month on the amount in arrears.

Provide support for personal pensions contributions

The Act allows employees to join any personal pension scheme of their choice. If your employees choose to join a personal pension scheme, you are required as an employer to provide administrative and accounting services that will enable them to make their contributions out of their payroll, pre-tax.

Provide remittance statements to the trustee

You are required to provide your trustee with monthly remittance statements containing the following details for all your employees:

–  The relevant income for your employees for the contributory period

–  The amount of the mandatory 13% employer contribution

–  The amount of the mandatory 5.5% deduction from the employee

If you sponsor a Tier 3 provident fund for your employees, your remittance statement should also contain the following information:

–  The amount of the voluntary  contribution deducted from the employee’s salary

–  The amount of the voluntary contribution you made on the employee’s behalf

Provide monthly pay records to scheme members

After making payments on behalf of your employees you are required to provide pay records to them not later than seven working days after the payment.

Keep records

Employers are required to keep records for each of their employees which include the total amounts paid in respect of the employee, the breakdown of these totals and the date on which these payments were made. This information should be kept for at least six months following the cessation of employment.

In addition, employers must also ensure that the information that feeds the remittance statement provided to the trustee is kept for every employee for at least seven years after the date of the remittance statement.

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