Disability Insurance 01 – Unemployment Insurance – Goverment Program in Case of Disability
Disability Insurance 01 – Unemployment Insurance – Goverment Program in Case of Disability
The main purpose of disability insurance is to to replace an individual’s income should they be unable to work as a result of either an accident or a sickness. In fact, People tend not to spend a lot of time thinking about the financial devastation that could result from a disabling injury or sickness therefore if disability strikes, the balance between personal earnings and expenses suddenly is upset, and the threat of financial disaster can quickly become a reality. In this article, we will discuss the government program that will help the short needed for disable workers.
Most employed people contribute to employment insurance through payroll deductions. Employers send the amount they withhold from the employee’s pay to government related department Employers are also required to contribute to the employment insurance fund and must add their portion of the premium to the employee contribution when submitting the monthly deductions.
Therefore, workers who contribute to this program entitle to received benefit in case of short term disability and sickness
a) Any workers have worked in insurable employment for at least 900 hours ( Depended on the rate of unemployment it may be changed) since the last claim, if that claim was made within the last year.
b) have a physician’s statement proving disability.
Benefit is payable for a maximum period of 15 weeks after 2 weeks of waiting period.
Remember the employment sickness or short term disability adopt a second payer principle if other disability benefit are payable
The benefits will be reduced dollar for dollar when the claimant receives:
1. employment income such as wages, commissions or bonuses
2. payments in compensation for an accident on the job or a work-related illness such as Workers’ Compensation benefits;
3. group insurance benefits for sickness or loss of wages;
4. compensation for loss of wages from certain accident insurance policies.
5. pension income or retirement income
The benefit will not be effected
1. Disability pension
2. Workers’ Compensation payments from a permanent settlement
3. A personal or individual sickness or disability wage-loss policy.
4. Retroactive raises in wages or salary.
I hope this information will help. If you need more information, please visit my home page at:
http://lifeanddisabitityinsuranceunderwriter.blogspot.com/
http://disabilityinsurance01.blogspot.com/
All rights reserved. Any reproducing of this article must have all the links intact.
I have been studying natural remedies for disease prevention for over 20 years and working as a financial consultant since 1990
Article from articlesbase.com
Categories: Social Security News Tags: Case, Disability, Goverment, Insurance, Program, Unemployment
Disability Insurance 01 – Unemployment Insurance – Goverment Program in Case of Disability
Disability Insurance 01 – Unemployment Insurance – Goverment Program in Case of Disability
The main purpose of disability insurance is to to replace an individual’s income should they be unable to work as a result of either an accident or a sickness. In fact, People tend not to spend a lot of time thinking about the financial devastation that could result from a disabling injury or sickness therefore if disability strikes, the balance between personal earnings and expenses suddenly is upset, and the threat of financial disaster can quickly become a reality. In this article, we will discuss the government program that will help the short needed for disable workers.
Most employed people contribute to employment insurance through payroll deductions. Employers send the amount they withhold from the employee’s pay to government related department Employers are also required to contribute to the employment insurance fund and must add their portion of the premium to the employee contribution when submitting the monthly deductions.
Therefore, workers who contribute to this program entitle to received benefit in case of short term disability and sickness
a) Any workers have worked in insurable employment for at least 900 hours ( Depended on the rate of unemployment it may be changed) since the last claim, if that claim was made within the last year.
b) have a physician’s statement proving disability.
Benefit is payable for a maximum period of 15 weeks after 2 weeks of waiting period.
Remember the employment sickness or short term disability adopt a second payer principle if other disability benefit are payable
The benefits will be reduced dollar for dollar when the claimant receives:
1. employment income such as wages, commissions or bonuses
2. payments in compensation for an accident on the job or a work-related illness such as Workers’ Compensation benefits;
3. group insurance benefits for sickness or loss of wages;
4. compensation for loss of wages from certain accident insurance policies.
5. pension income or retirement income
The benefit will not be effected
1. Disability pension
2. Workers’ Compensation payments from a permanent settlement
3. A personal or individual sickness or disability wage-loss policy.
4. Retroactive raises in wages or salary.
I hope this information will help. If you need more information, please visit my home page at:
http://lifeanddisabitityinsuranceunderwriter.blogspot.com/
http://disabilityinsurance01.blogspot.com/
All rights reserved. Any reproducing of this article must have all the links intact.
I have been studying natural remedies for disease prevention for over 20 years and working as a financial consultant since 1990
Article from articlesbase.com
Categories: Disability Pension Tags: Case, Disability, Goverment, Insurance, Program, Unemployment
Disabled New Jersey Public Workers Beware – New Case Reduces Benefits
New Jersey, (PRWEB) December 24, 2004
New Jersey’s public workers, including all state employees, firefighters, police officers and teachers, will lose the ability to collect workers’ compensation benefits when they also receive an Ordinary Disability Pension, the New Jersey Appellate Division has ruled. Decided November 8, 2004, the case of Rosales vs. State of New Jersey, A-2110-02T, reversed the trial judge’s finding that workers’ compensation benefits may only be offset against Accidental Disability Pensions. Prior to this decision, a public worker who was totally disabled from a non-traumatic event could collect an Ordinary Disability Pension and benefits from the workers’ compensation system at the same time.
This decision flies in the face of the Legislature’s clear intent as the applicable Statute permits public employees to receive their Ordinary Disability Pension without reduction by the amount of any post retirement compensation. Further, the Division of Pensions has consistently interpreted and applied the various statutory provisions to mean that there is no reduction of benefits for recipients of Ordinary Disability Pensions. The Division of Pensions in all of its publications, employee advisory releases and on its web site have told all public employees and employers that Ordinary Disability Pensions are not subject to a reduction for receipt of Workers’ Compensation periodic benefits. “The impact of the decision is enormous as there is a huge difference between the various types of pensions that are available to public workers and and we will now need to fight harder to obtain the best benefit for our public employee clients”, said Ricky Bagolie a Jersey City based workers’ compensation and disability attorney with Bagolie Friedman which represents many firefighters, police officers and state employees.
The three basic types of pension benefits are: 1) Retirement based on years of service over 55 multiplied by the pertinent wage (not applicable here); 2) Accidental Disability Pension set at 72.67% of the pertinent wage; and 3.) Ordinary Disability Pension set at 43.6 % of the pertinent wage. There are also significant tax advantages to the Accidental Disability Pension as it has been classified as a Workers’ Compensation benefit and, as such, is fully tax exempt from state and federal income tax. The Ordinary Disability Pension is subject to state and federal income tax and the Time Service Pension is fully taxable. The Police and Fireman’s Pension Retirement Act (PFRS) and the State Police Retirement System (SPRS) standard for an Ordinary Disability Pension requires 4 years of employment for eligibility and the SPRS requires 5 years. Each of these provisions contain a disability test that the member be permanently mentally or physically incapable of performing usual duty or any other available duty to which the employer is willing to assign the officer. The Public Employees Retirement System (PERS)and The Teachers Pension and Annuity Fund (TPAF) statutory test for award of an Ordinary Disability Pension provides that a member,under 60 years of age, who has 10 or more years of credit for New Jersey service and that the member is physically or mentally incapacitated for the performance of duty and should be retired.
No longer will a public employee be content to receive just an Ordinary Disability Pension. Because the benefits of an Accidental Disability Pension far outweigh the Ordinary disability pension, it is much more difficult to obtain. Procedurally, an employee who sustained an injury or occupational disease and who had to cease public employment would file for an Accidental Disability Pension and Workers’ Compensation. Very often the disability did not meet the “traumatic event” requirements of Accidental Disability and an award an Ordinary Disability Pension was given.
“Strategically, the employee would often not appeal the denial of the Accidental Disability Pension as they would be able to receive additional workers’ compensation benefits and now this must change and more pension rulings will have to be contested” said Bagolie. Bagolie Friedman represents first responders and has offices in Jersey City and Clifton, New Jersey and Hollywood, Florida. For more information, contact Mr. Bagolie or Alan Friedman at 201 656-8500 or info@bagoliefriedman.com or visit www.bagoliefriedman.com
Contact Ricky Bagolie 201 618 0508
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Categories: Public Employee Disability Pension Tags: Benefits, Beware, Case, Disabled, Jersey, public, Reduces, Workers
A Case for ?Third Schedule? Retirement Pension Funds in Sierra Leone
A Case for ?Third Schedule? Retirement Pension Funds in Sierra Leone
OVERVIEW:
The NASSIT Act, 2001 established a virtual state-monopoly in the NASSIT for the management and investment of pension funds in Sierra Leone. However, as is generally the case with monopolies and especially quasi governmental monopolies in Sierra Leone, we must continue to be vigilant and guard against inefficiencies in management and oversight, politically-driven investments, political interference, nepotism and a blotted bureaucracy which have in the past become hallmarks and recipes precipitating their subsequent failures and demise.
It is thus against this backdrop that the continued viability of the current retirement system remains to be seen especially as we continue to await the second statutory actuarial evaluation report and the failure by the Trust since 2006 to post an annual report encompassing the Trust’s operational performance and audited financial accounts for the fiscal years 2007 and 2008 (NASSIT website: www.nassitsl.org). Management and the Trustees must be reminded that pursuant to Section 16(1) of the NASSIT Act No.5 of 2001, the Trust is by law required to submit and publicly file such annual reports.
LONGEVITY RISK:
Despite the still very low life expectancy rate currently estimated at 41.24 years (CIA World Fact book Report March, 2009) and high infant mortality rate of 154.43 deaths per 1000 live births (UNDP Human Development Report, 2008) in Sierra Leone, the past few years have witnessed positive, though minimal movements in data reflecting a decrease in the nation’s longevity risk. This is borne from a comparative analysis of life expectancy figures of 35.4 years from 1970 to 1975 to 41.0 years in the period from 2000 to 2005 to the current 41.24 years estimated for 2009. Generally, the longevity risk in retirement is the hazard of aging and uncertainty of knowing how long one will live and how long social security retirement benefits, such as provided by the National Social Security and Insurance Trust (NASSIT) can go before one runs out of retirement funds prior to death. The focus of this article is thus how can one minimize the risk of running out of money in retirement through the use of annuities and retirement funds?
The Society of Actuaries in a survey report entitled “Key Findings and Issues: How Americans Understand and Manage their Retirement Risks” identified the following retirement risks viz: outliving assets; loss of spouse; decline in bodily function; healthcare and medical expenses and inflation. These retirement risks are not unique only to Americans as the same basic risks confront retirees in Sierra Leone as they seek to understand and manage their retirement options. Generally the most common retirement risks are categorized as follows:
Longevity Risks Investment Risks Planning Risks
According to the latest published data by NASSIT (NASSIT at a Glance Facts & Figures as at June 2008), the monthly average retirement pension payable currently in Sierra Leone is a paltry SLL108, 504.72 (One hundred and eight thousand five hundred and four Leones and seventy two cents). This amount represents a fraction of retirement income required by employees for basic sustenance in the current economic environment in Sierra Leone, where even a bag of rice costs more than the average monthly retirement provided by NASSIT. A retiree with even a modest family, not to mention our extended family system, would be hard pressed to provide and maintain a household based solely on the pension currently provided by NASSIT.
With a majority of the participants either at average or below average income earnings and hence contributing at the average and below average rates, it stands to reason that most of the scheme participants will not be eligible to receive pensions at even the modest average amount as currently computed by the NASSIT actuaries. Thus, the goal of a comfortable retirement envisaged by the architects of the NASSIT risks becoming a fleeting illusion, unless other new retirement options and vehicles are incorporated into the nation’s retirement and social safety network.
As postulated by Kerry Pechter in her book “Annuities for Dummies”, “many people confidently walk the financial high wire of life without a safety net. Others, especially those who are approaching retirement, feel more secure when a net is there to catch them-just in case the tightrope snaps”. In the Sierra Leonean context however the social protection and safety net is needed by all and not just a few, thus my continued passion in ensuring that the Trust is professionally run and maintains accountability consistent with actuarial, retirement and insurance principles.
REPEAL THE NASSIT MONOPOLY:
For with the inability of the NASSIT to provide the requisite financial safety net, based on the current actuarial projections, it is but prudent that government seeks to break up the NASSIT’s near monopoly over pension fund management in Sierra Leone to allow not only life insurance and annuity companies but more so retirement funds to establish and manage employer-sponsored retirement plans.
The NASSIT model is akin to the Social Security system in the United States which as a hybrid defined contribution and defined benefit plan, establishes and sets a fixed percentage both employees and employers contribute and also defines the benefit formula participants receive at retirement. As a result of conservative projections and outright ill-advised investments with little or no redeemable value-added equity to be realized in some investments even in the long term, the NASSIT cannot be solely relied on by Sierra Leonean workers for their retirement needs.
With the repeal of the NASSIT monopoly, employer sponsored retirement plans and annuities, with an investment and insurance component will be established and marketed to allow employees to save and invest in their own retirement.
THIRD SCHEDULE RETIREMENT FUNDS: What are they?
What I have elected to dub “Third Schedule Retirement Funds” emanates from provisions in the third schedule of the Sierra Leone Income Tax Act, 2000, which provides for the establishment of complying retirement funds with the approval of the National Revenue Authority (NRA) Commissioner.
This little known provision in our tax code already provides the legal and regulatory framework for the establishment of individual retirement accounts managed by these so-called Third Schedule Retirement Funds in Sierra Leone. These are intended to augment and provide other guaranteed income during retirement separate and aside from the NASSIT pension. Moreover, these retirement plans allow employees to save and invest for their own retirement by the employee authorizing the employer to deduct a certain percentage of his/her wages to be invested in the employer-sponsored plan.
Tax incentives and deferrals are usually provided by governments to encourage retirement planning, savings and participation. Amounts contributed by employees into such plans are not taxable resulting in a larger carry home paycheck monthly. Moreover, as an employee benefit, employers also contribute a percentage into their employees’ retirement accounts, with a concomitant tax savings by the employer.
However, the provisions of The First Schedule Part IV of the Income Tax Act, 2000 which requires a 15% withholding from payments on pensions and annuities needs to be repealed as it is regressive and discourages retirement savings. It is also envisaged that employee contributions are on a pre-tax basis so that employees participating in these retirement funds can take advantage of favorable tax brackets and rates. As an example, the tax rate for individuals with incomes over 480,000.00 Leones is 25% per annum while the tax rate for individuals earning over 7,500,000.00 Leones is 40%.
The United States based African-focused reinsurance consultancy company, Saddleback Re, in California managed by the author has over the past few months designed annuities and retirement policies to be introduced in Sierra Leone and managed under the provisions of the Sierra Leone Tax Code. Additional information on these retirement vehicles can be addressed to admin@saddlebackre.com.
ANNUITIES:
Annuities, whether fixed or variable, immediate or deferred are generally retirement tools or vehicles designed to supplement an employee’s retirement income and guarantee pension-like income over the life of the annuitant or beneficiary. These are only issued by insurance companies and have both a hybrid insurance contract and investment features.
An income annuity generally provides for conversion of a large sum of cash into monthly, quarterly or an ann ual payout wherein an insurance company agrees to pay the annuitant or beneficiary an income over a certain period of time.
According to the Sierra Leone Insurance Commission (SLICOM) 2006 Annual Report, the Life Insurance business sector is serviced by only 3 insurance companies, with a net industry wide premium of 1,323,640,000.00 Leones; with Aureol Insurance Company dominating with a 104% share of the market. Thus annuities which are principally life insurance contracts still have a long way to penetrate the Sierra Leone insurance marketplace.
THE SOCIAL SAFETY NET PROGRAM AS AN ANNUITY:
The Social Safety Net Program currently managed by the Ministry of Employment and Social Security represents a program that should have better been managed as an annuity. During the program’s launching in 2006, President Kabbah stated that “NASSIT has been able to pay back over 5.3 billion towards the establishment of the Social Safety Net Scheme. Additional support to the scheme amounting to 5.0 billion Leones will be made by government”. The program launched by President Kabbah in 2006 with paid up capital of 5.7 billion Leones and additional 5.0 billion investment pledged by government was designed to be administered by NASSIT, without any administrative costs and projected to reach an estimated 16,000 extremely vulnerable households, as a component of the country’s 2005 to 2007 Poverty Reduction Strategy Paper (PRSP).
However, since the Social Safety Net pilot adopted a cash transfer scheme the following has been expended, according to Ministry of Employment and Social Security presentation at the Regional Experts Group Meeting on Social Protection in Dakar, June 2008:
Cash: 200,000.00 Leones (US .00) per person for six months. The overall cost of the pilot was 3.746 Billion Leones (US .270 million ) 16,890 persons were targeted costing 3.396 Billion Leones (US .151 million) Administrative costs was 350 million Leones (US 8,644.07) Only 65 out of 156 chiefdoms were covered.
From the above figures the program as managed and supervised by the Ministry of Employment and Social Security clearly lacks long term sustainability, is too short term and lacking an entrepreneurial oriented vision. For with the amount of the initial seed money having been used to purchase annuities for all the participants in the targeted groupings, the benefits of retirement income and savings that annuities provide would have been made available to some of the most vulnerable members of our society. Rather the decisions of transferring management of the program from NASSITT, where the funds would have been better managed and invested to a Ministry program was a recipe for failure.
The author, Mr. Kortor Kamara has over 25 years experience in the insurance industry both in Sierra Leone and the United States. He is a Chartered Property & Casualty Insurer and holds the Workers Compensation Claims Professional (WCCP) designation. He is a Member of the Chartered Insurance Institute (London); Certified Self-Insurance Claims Administrator-State of California; Registered World Bank Consultant and has served as a Consultant on various Insurance initiatives in Sierra Leone, including design of the country’s first Title Insurance Policy.
In addition, Mr. Kamara is a graduate of Fourah Bay College, University of Sierra Leone, 1978-1981; studied Law at both the Univerisity of West Los Angeles School of Law and the California Southern School of Law in Riverside. He is currently a Doctoral Candidate in Insurance and Risk Management.
Through association with Saddleback Re, were he serves as the Regional Manager, Africa Division, Mr. Kamara is intimately involved in the provision of reinsurance coverage, policy design, loss control, training and risk management services to the African Insurance marketplace. Mr. Kamara can be contacted at Kortorkamara@yahoo.com.
www.saddlebackre.com.
Categories: Retirement Pension Tags: Case, Funds, Leone, Pension, Retirement, Schedule, Sierra, Third