adminthe pension fund ceases.
When they take up new employment, they may find that their new employer has an arrangement with a different occupational pension fund, to which they are expected to contribute. They thus begin contributing to a new pension scheme from scratch.
The disadvantage of this is that, given the frequency with which people these days change jobs, it becomes difficult to build up a sufficient pension contributions record to obtain a reasonable pension in one’s old age.
The national pension fund administered by NSSA is different. Contributions to the scheme continue no matter where one is employed, provided that employment is within the formal business sector and is not domestic employment.
During periods of unemployment or employment outside the formal sector, contributors can opt to make voluntary contributions to the NSSA pension scheme. They need to notify NSSA of their wish to do this within four months of leaving employment and have to pay double what they were paying to cover the employer’s contribution as well as their own.
Those who do not do this will resume their contributions when they next obtain formal employment. Their contribution record will continue from that point.
Supposing, for instance, that one has contributed to the NSSA pension scheme for 14 years is then unemployed for five years and no longer contributing to the scheme and then resumes employment, remaining in employment for a further 10 years until retirement at the age of 60.
The number of contribution years, presuming these were all full years, would be 24 years. This would be the contribution period taken into account when calculating the monthly pension to be paid.
Because the scheme is national, with contributions compulsory no matter where one is employed within the formal sector, contributions to the NSSA pension scheme are not refunded when a person leaves employment.
Contributions are only refunded if a person has contributed to the scheme for less than 12 months when he or she reaches the age when, under the scheme, a retirement benefit is due.
The age at which a NSSA retirement benefit is normally payable is 60 or, for those still working, 65. Farm workers and those working in categories of jobs stipulated by NSSA as arduous occupations can claim early retirement benefit at age 55.
If the person has contributed for more than 12 months but less than 120 months, a retirement grant is payable. If the person has contributed for more than 120 months then a monthly pension is payable.
Although the age at which retirement benefits are payable has been spelt out several times in this column, questions from readers of the column about when benefits are payable or whether contributions can be refunded before the stipulated retirement pension age continue to be received.
l Talking Social Security is published weekly by the National Social Security Authority as a public service. Readers can e-mail issues they would like dealt with in this column to [email protected] or text them to 0735 041 278. Those with individual queries should contact their local NSSA office or telephone NSSA on (04) 706517-8 or 706523-5.
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