Question Tag: Pension Right

Search 500 + past questions and counting.
Professional Bodies Filter
Program Filters
Subject Filters
More
Tags Filter
More
Check Box – Levels
Series Filter
More
Topics Filter
More
  • 5 Marks

PT – April 2022 – L2 – Q2d – Pension Entitlement Calculation

Compute the monthly pension entitlement of Mrs. Akoto based on her salary and months of contribution.

d) Mrs. Akoto has been engaged by Madane Ltd as the Marketing Manager for 30 years on an annual salary of GH¢20,000.
The following information relates to Mrs. Akoto:
i) Throughout her working life, she earned her best salaries from Madane Ltd.
ii) She has 408 months’ contribution to her credit.
iii) She retired on 31 March 2020 at the age of 60.

Required:
Compute her monthly pension entitlement.
(5 marks)

d) Computation of Mrs. Akoto monthly pension entitlement: Best 36 months (3 years) average salary * Pension right
Determination of best 3years average salary:
Best 3 years average salary = (20,000*3)/3 = 20,000
Determination of pension right:
37.5% + (408 months-180 months) * 0.09375 = 58.88%
Annual pension entitlement = 20,000 * 58.88% = 11,776
Monthly pension entitlement = 11,776/12 = GH¢ 981.33

  • 5 Marks

PT – July 2023 – L2 – Q2d – Income Tax Liabilities

Explanation of the basis for calculating pension benefits under the National Pensions Act, 2008 (Act 766).

Explain the basis for calculating pension benefits under the National Pensions Act, 2008 (Act 766). (5 marks)

The basis for calculating pension benefits under the National Pensions Act, 2008 (Act 766) includes the following key parameters:

  1. Age at Retirement:
    • The retirement age can be full retirement (60 years or more) or reduced pension (between 55 and 60 years).
  2. Number of Months Contributed:
    • The number of months of contributions to the scheme prior to retirement, with a minimum of 180 months of contributions required.
  3. Earnings or Salaries:
    • Pension benefits are calculated based on the best three years or 36 months of basic salaries on which contributions were paid.
  4. Pension Right:
    • The pension right starts at 37.5% for 180 months of contributions and increases by 0.09375% for every additional month of contributions beyond 180 months, up to a maximum of 60%.
  5. Early Retirement Reduction Factor:
    • For reduced pensions (before age 60), a reduction factor is applied to ensure that early retirement benefits are actuarially equal to full retirement benefits.

Take control of your business data with insight and in-depth understanding by taking this course. 

Services

Contact Info

  • +233203701923
    +233543919232
  • info@noohrabusiness.com

Get In Touch

Follow us on our social media and get daily updates.

Facebook-f Twitter Linkedin-in Envelope