How Is Your Pension Calculated
How Is Your Pension Calculated
Pensions are forms of retirement income that are usually provided by employers to employees. The calculation depends on some elements. Which can vary on the type of pension plan you have enrolled for. The calculation usually considers;
- Years of Service: The number of years you have worked for the employer offering the pension
- Final Average Salary: The average salary you have earned over a specified period, often the last few years of your career
- Pension Multiplier: This is the percentage determined by how much average salary you received for each year of service
READ HERE: How can I check how much money I have in my pension?
Factors To Consider When Calculating Your Pension
- Inflation adjustment
- Cost of living adjustment
- Early retirement reduction
- Survivor benefits
- Taxes
Percentage Contributed By Employers
The employer currently contributes at a rate of 16% of pensionable salary in respect of service” members and 13% in respect of ”other” members, reflecting the differences in the benefits structure of these two categories of members. All members of the fund contribute at a rate of 7.5% of pensionable salary
Calculation Tools
- Pension calculator by Bankrate
- Retirement calculator by Kiplinger
- Pension estimator by Social Security Administration
Amount Paid When You Retire
Following your retirement, a member receives a combination of a gratuity lump sum and a pension, similar to retirement benefits. This is how the lump sum payment calculated
- From the vested pot: 6.72% of the final salary multiplied by the vested service
- From the savings pot:6.72% of the final salary multiplied by the savings service
READ ALSO: How can I check my GEPF pension balance?
Contact Details Of GEPF
- Toll-free number: 08 00 117 669
- Fax: 012 326 2507
- Email: enquiries@gepf.co.za
- Postal Address: GEPF Private Bag X63, Pretoria
- 0001
If you know how to calculate your pension helps you to prepare for your financial future and security as well as any unforeseen troubles that may occur. Government Employee Pension Fund official website