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Description
A member who has been proved to be permanently incapable of efficiently discharging duties by reason of illness of mind or body may be retired on health grounds under Section 27 of the LASF Act.
Qualifying Conditions
A member qualifies to be retired from the service of the employer if certified, by at least two medical practitioners, to be permanently incapable of efficiently discharging duties by reason of illness of mind or body. If such illness:
A) was not occasioned by the member’s own default, and
i. if admitted to the Fund in a good state of health and as at least 10 years of service, the member shall be granted a retirement benefit;
ii. if admitted to the Fund in a good state of health and has had seven years but less than ten years of service, the member shaIl be granted lump sum equal to twice the amount of the contributions paid into the Fund by the member, together with interest thereon at the rate of 4% per annum, compounded annually;
iii. if admitted to the Fund in a good state of health and has not had at least seven years of service, the member shall be granted lump sum equal to the amount of the contributions paid into the Fund by the member, together with interest thereon at the rate of 4% per annum, conmpounded annually;
iv. if admitted in ill health, the member shall be granted a sum equal to twice the amount of the contributions paid into the Fund by the member, together with interest thereon at the rate of 4% per annum, compounded annually
B) was occasioned by the member’s own default, the member shall be granted a lump sum in accordance with the provisions of Section 33 of the Act as if he had retired voluntarily, meaning that:
i. if such member has had less than seven years continuous service, the member shall be granted lump sum equal to the amount of the contributions paid into the Fund by the member, together with interest thereon at the rate of 2% per annum, compounded annually;
ii. if such member has had seven years of service or more, the member shall be granted lump sum equal to twice the amount of the contributions paid into the Fund by the member, together with interest thereon at the rate of 4% per annum, compounded annually;
Worked Example
Ms Alongosi was constantly ill for almost three years. Upon determining that she was terminally ill and not able to perform efficiently in her duties, the University Teaching Hospital recommended her for retirement on account of the illness. The matter was presented before the employer, Lusaka Water and Sewerage Company, who accepted the recommendation and retired her on 30 November 2005. Her particulars are as follows:
Date of Birth:
Date of Entry:
Date of Termination:
Length of Service:
Age at Retirement:
Annual salary at retirement: |
11 January 1959
11 April1985
09 December 2004
236 months (19 years and 8 months)
45 years
K4, 811, 600.00 |
Under subsection 1, the computation will be as follows:
Annuity = Annual salary x Length of service =
660
14,811,600.00 x 236
660
= 5,296, 269.09
Commutation of 1/3 gross annuity for lump sum
Gross Annuity = K5, 296, 269.09
Less 1/3 Commuted = K1,765,423.03
Net Annuity = K3,530,846.06
Lumpsum payable = 1/3 Comm. (K1, 765, 423.03) x Comm. Factorl (28.00)
= K49, 431,844.84
Under subsection 2, the computation will be as follows:
Annuity = Annual salary x Length of service =
660
14,811,600.00 x 236
660
= 5,296, 269.09
Commutation of 1/3 gross annuity for lump sum
Gross Annuity = K5, 296, 269.09
Less 1/3 Commuted = K1,765,423.03
Net Annuity = K3,530,846.06
Lumpsum payable = 2/3 Comm. (K3, 530, 846.06) x Comm. Factorl (28.00)
= K98, 863,689.68
Ms Alongosi will be requested to choose whether to be paid under subsection 1 or subsection 2.
* If she elects to be paid under subsection 1, she would get a lump sum payment of K49, 431, 844.84 first, and start drawing a pension (currently paid one year in advance, at the beginning of each year) of K3, 530, 846.06 until death.
* If she elects to be paid under subsection 2, she would get a lumpsum payment of K98, 863, 689.68 first, and start drawing a pension (currently paid one year in advance, at the beginning of each year) of K1, 765, 423.03 until death.
Required Documents
Upon retirement on medical grounds, the member will be required to present the following documents to the Fund in order to access the benefits:
a) introductory letter from the employer, signed by either of the signatories registered and recognized by the Fund
b) official retirement letter from the employer
c) certified copy of the member’s NRC
d) LASF forms S/1 S/5, duly filled in and certified by both the employer and member
e) A medical certificate, signed by at least two medical practitioners, confiriming the illness or health grounds for retirement
Important Notes
1. The most notable difficulty that claimants under this category will face usually is when they present claim forms without a medical certificate by at least two medical practitioners. The Fund does not accept claims for benefits under this category without a medical certificate. Secondly, the claim will also be rejected if the certificate is signed by one medical practitioner instead of two or more.
2. Commutation Factors are provided for in the Act to determine the benefits due to a member for a particular age. |
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