Tuesday 09th February 2016

banner.png

news menu leftnews menu right

Private pension fund collects over 800 mln birr PDF Print E-mail
By Pawlos Belete   
Tuesday, 21 August 2012 06:31

The newly established Private Organization’s Employee Social Security Agency (POESA) collected more than 800 million birr in the first year of its operation according to the Ethiopian Revenue and Custom Authority (ERCA). ERCA is the body delegated by the pension fund to collect private organization pension contributions on its behalf. 
“The authority has collected more than 800 million birr in private organization’s pension contributions and transferred it to the agency,” said Melaku Fenta, Director General of ERCA with ministerial position while briefing journalists about the authority’s performance.  
The permanent employees of private organizations have started contributing to their pension like public employees since July 08, 2011. Employees have the right to pension if they move from one institution to another as long as the institutions are covered by pension schemes.
Private companies which have permanent employees settle their pension contribution payment through the revenue collecting office of the government. Employees will be provided with a social security number if they do not have a tax payer identification number (TIN). For those with TIN, it serves as a social security number.
The pension fund headed by Getachew Belay, who initiated the reforms for ECRA, does not cover those employees in the private sector working on a contractual basis. Private firms which have permanent employees but do not have a provident fund scheme prior to the enactment of the proclamation are forced to join the fund. However, organizations that have a provident fund program prior to the establishment of the fund join it if they wish.
An employee who contributes to the pension fund and leaves office willingly prior to 10 years of service will not receive any compensation. However, if the employee leaves office between 10 and 20 years of service, the employee is entitled to receive the sum of the contributions made on its part immediately after leaving office. However, the employee is not entitled to collect the contribution made by an employer on behalf of the worker.
Both the employee and employer are expected to contribute in a progressive manner. The employee is expected to contribute five percent in the first year of operation that starts from July 08, 2011 and ends July 07, 2012. Six percent in the second and seven in the final year while the employer is subjected to contribute seven percent in the first year of operation, eight in the second and 11 percent finally. The pension contribution from both parts is summed to 18 percent of the gross salary of the employee during the final year.


blog comments powered by Disqus
 

POLL 1

1. Do you think poverty in Africa is declining?

(90 votes)

32.2%   (29)
63.3%   (57)
4.4%   (4)
Loading...

POLL 2

2. Do you think the foreign currency shortage will be an issue in the next quarter of the year?

(194 votes)

92.3%   (179)
4.1%   (8)
3.6%   (7)
Loading...


Powered by Spearhead Softwares Joomla Facebook Like Button
Follow us on Twitter

PANKHURST'S CORNER

The Dramatic History of Addis Ababa Part 13: The Beginnings of Cabinet Government

The object of the present series of articles is to consider how the founding and early growth of Addis Ababa witnessed Transformation in other fields of Ethiopian economic, social and political life. read more...

ENTREPRENEUR PROFILE

Name: Efrem Tesfaye
Education: BA in Business Information System
Company name: Afalagi Search Engine PLC
Studio title: Owner and General Manager
Founded: 2011
What it does: Information for callers read more...

DOING BUSINESS

This week saw the 8th “Africa Arise” conference, organized by Beza International Church in cooperation with members of the diplomatic community in Addis Abeba. read more...

BUSINESS & ECONOMY

Citing downturns in key emerging economies, the International Labor Organization (ILO) recently disclosed that the global unemployment rose in 2015 and is expected to worsen further over the next two years.

read more...