The Ethiopian Private Organization’s Employee Social Security Agency has collected more than 800 million birr in the first year that it had been in operation according to the Ethiopian Revenue and Custom Authority.
The authority has been able to collect over 800 million birr in pension contributions from private organizations according to Melaku Fenta, Director General of ERCA in a statement to the press in regards the performance of the authority.
Private companies have been handling payment of pension contributions through the revenue collecting offices.
The permanent employees of private organizations started contributing to the pension fund in July of 2011. The system provides a social security number for those that don’t have TIN numbers and for those that do the TIN serves as a social security number.Employees and employers are expected to contribute to the fund progressively with employees contributing 5 percent and the employer contributing 7 percent in the first year and progressively growing to eight and eleven percent in the final year to total 18 percent of the gross salary of the employee in the final year.
Employees who leave their positions before 10 years of service will not receive payment from the fund and those that leave after 10-20 years of service will only be able to receive the contributions they paid into the fund but will not be entitled to the contributions made by the employers on their behalf.
Employees will retain the right to pension if the move from one institution to another also covered by the pension fund.
Source: Capital
