What is the Procedure when an Employee is terminated or Resigns, etc. to obtain their monies and what percentage is paid to the Employee?
The procedure to obtain monies from their pension plan are as follows:
- Notification via a formal letter by the employer to the insurer, informing them that an employee has been removed from the plan. In turn the employer should seek to recover the pension plan hand book from the employee.
- The insurer will then compute the employee’s refund of contribution based on an agreed vesting schedule (example listed below)
Completed Years of the Plan Participation
1-2 Years 33%
3-5 Years 50%
6 Years and Over 100%
Taxation of Benefits
- A certificate of Tax Compliance must be obtained from the GRA in order to facilitate payment of pension benefits
- If an employee exists the pension Plan before the retirement date, only the employees contributions will be exempt from Income Tax
- The employer’s contribution; employer’s and employee’s interest will be deemed as income and will be subject to Income tax