Here is all You Need to know about Provident Fund Deduction on TSC Teachers’ Payslips
The Teachers Service Commission (TSC) has implemented a new deduction on the payslips of teachers employed under the Commission.
Teachers are now set to contribute 2% of their monthly salaries via the Provident Fund deduction to the new savings program.
There are parallels between the provident fund and the pension fund.
The objective of the deduction is to give lump-sum payments to employees when they exit the service. This is different from pension funds which include both lump sum and monthly pension payment components. Although both types of funds involve lump sum payments at the end of employment, there are differences between gratuity and provident funds.
Pension funds operate as defined benefit plans while provident funds are defined contribution plans.
Government employees (this includes teachers) will be contributing 7.5% of their monthly basic salaries to the new contributory pension plan with the employer matching the amount with 15%.
To easen the burden teachers will contribute only 2% of their basic pay in the first year (2023).
In the third year, teachers will contribute 5% of their basic pay while the full 7.5% deduction will be effected as from the third year.
The following are employees who will be covered by the new pension scheme.
the scheme will cover all employees employed by the public service employed by:
- The National Police Service Commission, NPSC,
- The Teachers Service Commission , TSC,
- The Public Service Commission, PSC,
- Any other service that the Cabinet Secretary determines to be a public service for the purpose of the Act.
The scheme will be mandatory for all employees under the age of 45 years.