Understanding Mandatory contributions.
Enacted as the mode of contribution by which a member can undertake to guarantee a retirement or any other associated benefits, the mandatory contribution is the sum of money that all workers are liable to pay upon taking up employment.
As from 1st January 2023, the employee mandatory contribution is set at 5% of their gross monthly salary and is further matched by a 5% contribution that the employer makes on behalf of employee.
Therefore the total mandatory contribution that an employer makes monthly on behalf of the employee stands at 10%.
By undertaking monthly mandatory contribution for a period of either the last 10 years continuously immediately prior to retirement or for any 20 year period with breaks in between, effective from 1979, a member can qualify for a retirement pension.
If the member fails to contribute for the specified period above, he/she will not be entitled for a monthly retirement pension. However the member will be entitled to a lump sum payment of all contributions accrued for the period he/she has been a member plus interest rate.
