It is not impossible for someone who has retired from active service either in the private or public sector to get employed again. As a retiree who is already receiving pensions, it is sometimes confusing how their new employer would treat their pension contributions from their new employment.
The question begging for answers include: Will I open another RSA? What happens to the monthly pension that I currently receive? Should I even continue to contribute again? And so on.
Here’s the thing. As a retiree who just got employed again, it is important to note that nothing stops your new employer from remitting your monthly pension contributions. Also, as the employee, you are not stopped from remitting your portion of the monthly pension contribution from your new employment.
The PRA mandates all persons employed to contribute a certain percentage of their monthly emoluments as pension contributions. Therefore, whether one has retired before, does not apply. In actual fact, a refusal to continue to participate in the CPS will amount not only to violation of the PRA but also a way of “short-changing” the employee in terms of accruable retirement benefits.
How is this going to be treated?
One would be curious to know how then will the contributions received by a retiree who is already receiving monthly pensions be treated?
Interestingly, when a person retires, the PFA moves his RSA balance to a new Fund called the Retiree Fund (Fund 4) from the active Fund. It is from this Fund 4 the retiree is paid his monthly program withdrawal or monthly pension.
If a retiree who is already on programme withdrawal or monthly annuity secures another employment, his new contributions (both employer and employee portions) will be added together and treated as Voluntary Contributions.
One would have expected that since the already retired employee who now secures another job is no longer qualified to be called a retiree and so should be reclassified as such (i.e. moved back to the appropriate active Fund).
Accordingly, the PRA prohibits such reclassification or movement. Therefore, once a member has been moved to the Retiree Fund, he or she cannot be moved or reclassified to any other Fund.
In addition, a person is only allowed to have one RSA PIN in a lifetime. Therefore, his contributions can only be received via his only RSA PIN wherever his pension fund resides and in this case the Retiree Fund 4.
In conclusion a retiree who secures a new job will have his pension contributions from his new employment categorised as Voluntary Contributions with all the VC regulations applied in terms of contributions and withdrawals.
Note that this won’t necessarily stop his or her monthly pension payment that is already on-going.
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