Teachers’ Basic Salary Scales After Phase 2 of Pension Deductions

Teachers’  Salary Scales After Phase 2 of Pension Deductions

Starting January 2021, civil servants will suffer a pay cut for onward remittance in the newly created Public Service Super annuation Scheme. The move will be taken by the State to reducing the pension burden shouldered by the Exchequer.

The 7.5 % pension contribution will be implemented in three phases, beginning January 2021, where 2 % of the basic salary will be deducted till December 2021 . Beginning January 2022, the pension scheme will rise to 5 % of basic salaries.

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Under the current pension scheme, civil servants, unlike workers in the private sector, do not contribute to their pension and their benefits are paid from taxes. Some highlights of the scheme include;

• This scheme will be rolled out from January 2021. The scheme will affect all civil servants including; teachers, police officers and prison officers.
• The scheme will affect employees who will be aged 45 years and below as at 1^st January 2021. Though the employees above 45 years who wish the scheme will be free to apply for inclusion in the new scheme or remain in the old one. The current Public Service Pension arrangement will be closed to all new employees.
• All those employed by the government will be required to contribute 7.5% of their basic pay towards the fund and the government to subside with a contribution of 15% towards the same.
• TSC has taken care to protect teachers against the negative effect this may have on the pay slips.
• The scheme will be implemented in a period of three years: In the first year, teachers will contribute 2% of their basic salary and the government will contribute 15%. During the first year of implementation, the male teachers will be cushioned by stopping WCPS deductions. In the second year, the teacher will contribute 5%, and the government 15%.Finally in the third year, the teacher will be deducted 7.5% but the government will give 15%. This will then be effected till the teacher retires.
• The contribution will be deducted from the salary before tax is calculated. This will reduce the tax level and improve the pay of an employee, alongside helping the employee to evade double taxation of pension contributions and payouts.

The teachers’ basic pay after second phase of pension deductions are tabulated below. The pay however maybe higher in case SRC approves TSC CBA counter proposal.