- 5 Marks
Question
Ama Adaklu retired in December 2022 after contributing to SSNIT for 300 months, working with three different employers. The last 5 years of her annual salary are as follows:
| Year | Annual Salary (GH¢) |
|---|---|
| 2018 | 200,000 |
| 2019 | 220,000 |
| 2020 | 250,000 |
| 2021 | 450,000 |
| 2022 | 500,000 |
Required:
Compute the monthly pension payable to Ama Adaklu. (5 marks
Answer
Computation of Monthly Pension Pay
Pension = (Three years average salary × Pension right × Early retirement reduction factor)
Three years average salary = (250,000 + 450,000 + 500,000) / 3
= GH¢400,000
Pension right:
- Minimum right: 37.5%
- Additional percentage: (300 months – 180 months) × 0.09375 = 11.25%
- Total pension right: 48.75%
Since Ama Adaklu retired at age 60 after working for 25 years, there is no early retirement reduction factor.
Pension = 48.75% × GH¢400,000
= GH¢195,000
Monthly pension pay = Pension entitlement / 12 months
= GH¢195,000 / 12
= GH¢16,250
- Tags: Income Tax, Pension Computation, Retirement Benefits, SSNIT
- Level: Level 2
- Topic: Income Tax Liabilities
- Series: MAR 2024
- Uploader: Theophilus