ISLAMIC REPUBLIC OF AFGHANISTAN MINISTRY OF LABOR… HR Guidebook.pdf · Also, this Guidebook will...

DRAFT GUIDEBOOK FOR HR MANAGERS FOR IMPLEMENTATION OF THE PENSION REGULATION FOR THE CIVILSERVICE EMPLOYEES OF AFGHANISTAN – March 2011

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ISLAMIC REPUBLIC OF AFGHANISTAN

MINISTRY OF LABOR, SOCIAL AFFAIRS, MARTYRS AND DISABLED (MoLSAMD)

GUIDEBOOK FOR HR MANAGERS FOR IMPLEMENTATION OF THE PENSION REGULATION FOR THECIVIL SERVICE EMPLOYEES OF AFGHANISTAN

(March 2011)

Prepared by MoLSAMD and in cooperation with IARCSC


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I am pleased to inform you that the Ministry of Labor, Social Affairs, Martyrs and the Disabled(MOLSAMD) in close cooperation with the Independent Administrative Reform and Civil ServiceCommission and the team from the Afghanistan Pension Administration and Safety Net Project, hasprepared the Guidebook for the Human Resources Officers in State bodies on how to implement thePension regulation for the Civil Service Employees of Afghanistan

An inter-ministerial Steering Committee to draft a pension reform strategy and the Pension

comprised of senior members from MoLSAMD, MOF and IARCSC, supported by a Technical Working

force on September 17 2009.

Having new pension scheme and new Pension Regulation in place brought the need for creating newset of administrative procedures and this Guidebook is one of them. Administrative procedures arethe basic rules for implementing regulation and for administering, coordinating, and articulatingprograms affecting more than one department or division.

Our Guidebook contains specific detailed rules to put regulation into practice, generally telling how,by whom, where, and when things are to be done.

This Guidebook is prepared to acquaint Human Resources (HR) Officers from State Institutions andother Government agencies with the Pension Regulation for The Civil Service Employees.

Our intention was to provide the HR Officers with basic information regarding the Regulation forCivil Service Retirement. It describes and explains eligibility for pension, different types of pension,pension contribution, how to determine the actual length of service, payment of pension and thecomplete application process in a step by step format. One of the most important chapters of thisGuidebook is the definition of the responsibilities of Human Resources Officers in the procedure toprocess pension applications.

The contents of this Guidebook will apply to the employees covered by the Regulation.

This Guidebook has been written for information and instruction only; it does not replace theRegulations which will prevail if there is any conflict between the two documents.

Also, this Guidebook will be updated time to time as needed by the Ministry of Labor, Social Affairs,Martyrs and the Disabled (MOLSAMD).

We do hope that this Guidebook will help you in your future work.

Yours sincerely,

H.E. Amena Afzali, Minister


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Table of Contents

1. INTRODUCTION ..................................................................................................................4

2. GLOSSARY OF TERMS .........................................................................................................5

3. PREFACE.............................................................................................................................. 7

4. RESPONSIBILITIES OF HR OFFICERS DEALING WITH PENSION ISSUES .......................... 8

6. DETERMINING ACTUAL LENGTH OF SERVICE................................................................. 15

7. COVERAGE OF PENSION BENEFITS .................................................................................. 16

8. PENSION CONTRIBUTIONS............................................................................................... 16

10. PAYMENT OF PENSIONS ................................................................................................... 20

11. PENSION APPLICATION PROCEDURE .............................................................................. 20

12. APPEAL.............................................................................................................................. 26

13. QUESTIONS AND ADDITIONAL HELP............................................................................... 26


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1. INTRODUCTION

This Guidebook is prepared to acquaint Human Resources (HR) Officers from State Institutions andother Government agencies with the Pension Regulation for The Civil Service Employees published inthe Official Gazette No: 992 on 17 August 2009. The Guidebook is intended to provide the HROfficers with basic information regarding the new Regulation for Civil Service Retirement. Itdescribes and explains the complete application process in a step by step format. It also includesdefinition of the responsibilities of Human Resources Officers in the procedure to process pensionapplications. The contents will apply to the employees covered by the new Regulation.

This Guidebook has been written for information and instruction only; it does not replace theRegulations which will prevail if there is any conflict between the two documents.

This Guidebook will be updated time to time as needed by the Ministry of Labor, Social Affairs,Martyrs and the Disabled (MOLSAMD).


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2. GLOSSARY OF TERMS

This glossary is intended to define and elaborate the terms used throughout this Guidebook.

Civil service employee: person employed by the civil service of Afghanistan includingpermanent and contractual employees.

Retirement: means end of the employment service period of a civil serviceemployee in the organization in line with provisions of theRegulation.

Pensioner: is a civil servant whose period of service is completed in the relatedorganization and she/he is recognized eligible for pension benefit tobe paid to her/him.

Pension contributions: means withholding a certain percentage of an employee’s monthlysalary and the contribution of organization to be transferred toTreasury Department of MOF

Pension benefit: means payment of cash funds to pensioner or his/her survivors inaccordance with provisions of this regulation

Survivors: means: wife, husband, unmarried daughter(s), son(s) under age (18)or coupled with education or disabled or have constant illnesspreventing them to work or bound to complete the military service.Father, mother, unmarried sister(s), brother(s) under age (18) orcoupled with education or bound to complete the military service,subject to that the employee had been responsible for his/hersupport/ custodianship and the foetus of the deceased femaleemployee, born alive.

Disability: Total and partial and permanent disability by reason of medicallydeterminable physical or mental impairment that prevent a personfrom rendering useful and efficient service.

Final wage: means average of monthly wage and allowances (khader andprofessional) over the final three years actual service, taking inaccount annual increases in wages. The final wage is based on thegrade and rate set after the completion of the IARCSC Pay & GradingReform. If individual worked for the period less than full three yearson P&G reform rates, the actual number of years and months will betaken into account for calculation of the average.

Actual Length of service: means the total period of employment that the civil servant inaccordance to the provisions of law executed in the organization on


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actual – base when pension contribution has been withheld fromhis/ her monthly salary

Voluntary retirement: is a retirement that a civil servant employee, after completion oftwenty five (25) years actual length of service and civil servants overfifty-five (55) years of age are eligible to claim /request for voluntaryretirement.

MOLSAMD: Ministry of Labour, Social Affairs, Martyrs and Disabled of IslamicRepublic of Afghanistan

Organization: State Institutions & other Government agencies - Any agency,branch, department, institution, university, institution of highereducation, or board of the state

IARCSC: Independent Administrative Reform and Civil Service Commission ofIslamic Republic of Afghanistan

MOF: Ministry of Finance of Islamic Republic of Afghanistan

New Regulation: the new Pension Regulation for The Civil Service Employeepublished in the Official Gazette No: 992 on 17 August 2009

SOEs: State owned enterprises

The Government: The Government of the Islamic Republic of Afghanistan

Contribution amount: The amount contributed by a civil servants or the amountcontributed by the Government to the pension scheme.


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3. PREFACE

Civil service pension reform

Afghanistan’s pension system is applicable to civil servants, teachers, employees of state-ownedenterprises (SOEs) and civil servants of the Afghanistan National Army (ANA), Ministry of Interior(MOI) and National Directorate of Security (NDS). All sectors of the civil service are undergoing rapidand comprehensive transformation which affects the compensation and remuneration of publicsector employees.

An inter-ministerial Steering Committee to draft a pension reform strategy and the Pension

comprised of senior members from MoLSAMD, MOF and IARCSC, supported by a Technical WorkingGroup. The Regulation was promulgated in the Official Gazette on August 17 2009 and came intoforce on September 17 2009.

Security Sector pension reform

A separate Regulation and Administrative Procedures will cover Service HR in the security sector.

Reform notes

Employees who have not been re-classified according to the new Pay & Grading scales under thereforms implemented by IARCSC will continue to be governed by the old pension rules as published

420 Hijrey.

MoLSAMD will continue to administer the new pension scheme. MoLSAMD and IARCSC will ensureuniform application across all agencies.

The reform of the pension scheme will ensure that the process becomes more user-friendly andefficient.

The administration of the pension scheme will be computerized to facilitate faster processing ofpension cases as well the execution of payments.

Civil servant/Employer Contributions - Both the employer (the Government) and the civil servant willcontribute an equal 8% of basic salary of the individual civil servant plus allowances for those civilservants who have been re-classified under the pay grading reforms.

Civil servants will have deductions made to their salaries to pay for the pension. These deductionswill be made before salaries are paid to civil servants.

Old pension scheme employees who have not yet re-classified under the Pay & Grading reforms willcontinue to make contributions at the rate of three percent (3%) until they are re-classified.

The total actual length of service, prior to and after, the implementation of the re-classificationunder the Pay & Grading Reform will be taken into account.


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4. RESPONSIBILITIES OF HR OFFICERS DEALING WITH PENSION ISSUES

Government Human Resources Officers are responsible for the following:

Determining who is eligible for a pension and the category of pension. Preparing and keeping the individual HR records of civil servants in their organization.

Pension files and records must be maintained in a secure and accessible locaon for 4 0 yearsfrom the commencement of the file. Attention should be paid to the process of recordmaintenance, storage and retrieval. Pensioners’ circumstances change and files must bemaintained. Longer term pension records will be used to help with pension systemsplanning. Ae r the per i od of 4 0 years those records should be transferred to the GeneralArchive of each respective organization.

Informing civil servants of their retirement rights and responsibilities under the PensionRegulation for the Civil Service Employees of Afghanistan.

Using the new forms and following the approved procedures and Guidelines within their HRDepartment or Directorate.

Completing individual retirement records and ensuring that records are accurate. Thisincludes application forms and work history forms.

Sending completed retirement application documents to the Pension Department ofMoLSAMD.

Preparing and completing civil servants employee and/or their survivor’s retirementapplication.

Answering questions from civil servants and/or their survivors regarding their retirementrights, benefits and the application process.1

To document and maintain an accurate record of all Civil Service Employee Survivors wherea Civil Service Employee has responsible for the Survivors support or custodianship.

1 There are two types of Survivors

The Survivors of the deceased Civil Service Employee prior to his/her retirementThe Survivors of the deceased Civil Service Employee/Pensioner after his/her retirement

The HR Officers are responsible only for the first type of the Survivors (prior to retirement).

The second type of the Survivors is the responsibility of the Pension Department


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5. TYPES OF RETIREMENT

There are five categories of retirement to determine eligibility for pension benefits under the newPension Regulation for the Civil Service Employee.

Category 1: Attaining normal retirement age – sixty-five (65)

A civil servant is eligible for normal age type of retirement upon meeting the required retirementage of sixty-five (65).

* A civil service employee attaining sixty-five (65) years of age and his/her contract isextended based on need of the relevant organization and his/her agreement, in this case his/herpension benefit shall be increased by 3% for each extra year of service over age sixty-five (65), butnot exceeding maximum of eighty (80) % of the Final wage.

Category 2: End of Service period (Forty years actual length of service)

A civil servant is eligible for this type of retirement upon meeting the requirement of forty (40) yearsof actual length of service, regardless of age.

Category 3: Voluntary retirement

Voluntary retirement is the termination of service before the normal retirement age by the civilservants own will, i.e. termination of the service took place upon the employee’s request. A civilservant is eligible for voluntary retirement after attaining fifty-five (55) years of age and fulfillingactual length of service of twenty-five (25) years.

Early retirement:

There are four special cases of early retirement:

a. Age 55 and minimum of 25 Years of Service (YOS) met

It is possible to retire early with regular pension, provided a civil service employee hascompleted 25 years of service. However there may be penalties which apply and the employeecannot access a full pension (see below on the Penalty for Early Retirement).

b. Age 55 but less than 25 years of service:

A civil service employee who is 55 but who has not completed 25 years of service is ineligiblefor an early pension. S/he must wait until they have either completed 25 years or service orreaches 65 years of age.

c. Age is less than 55 and has 25 years of service.

A civil service employee who has 25 years of service, but who is less than 55 years of age isineligible for early rer eme nt . S/he mu s t wa i t unl they reach 55 bef ore t hey are eli gible f orearly retirement. Or if they choose to separate they may apply for pension at age of 65.


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d. Age is less than 55 and has less than 25 years of service.

In this case, the employee has to wait until age 65 to apply for benefit or connue wo r ki nguntil both the above conditions get satisfied.

Deferred Pensions

Individuals may choose to defer the receipt of pension benefits following permanent or temporaryseparation from the civil service and start receiving pension benefits at a later date.

In cases (b), (c), and (d) as described above, deferral will be a mandatory requirement if conditions ofretirement are not met.

In such cases the civil service employee must apply for pension benefits to the HR Officer of therelevant organization. The HR Officer will be required to submit the application for pension benefitson behalf of such an employee to the Pension Department following the standard process at thepoint of separation from the civil service. The employee should indicate the preferred period ofdeferral on the application if the duration of this period is known.

The HR Officer should ensure:

One copy of the pension application file is retained by the HR Officer One copy of the pension application file must be retained by the civil service employee, and One copy of the pension application file must be sent to the pension Department

When the individual chooses to start to receive pension benefits the pension, s/he will then applydirectly to the Pension Department. It will be responsibility of the Pension Department to store allthe pension application files of these individuals until a pension benefit is awarded. Following theaward of a pension benefit standard Pension Department procedures apply.

If a former civil service employee who had separated from service rejoins the civil service, the HRofficer of the state organization where employee now works will follow standard pension benefitapplication procedures.

Civil service employees who have deferred and then rejoin the civil service will retain the right to thetotal actual length of service calculated by combining all periods of civil service employment.

The Pension Department will be required to review all applications on record for a civil serviceemployee and calculate the pension benefit based on the combined total of actual length of service.

Individuals not starting to collect pension benefits on time

In some situations a pensioner may not start collecting pension benefits immediately uponnotification of award.

In such cases the Pension Department must retain the pension application file and activate thenormal payment procedure for the benefit when the pensioner attends the Pension Department tostart collecting.


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Penalty for Early Retirement

The following provisions will start to apply five years after the promulgation of the Pensionto all cases of voluntary retirement where individual has not

reached the age of 63.

In the case of Civil Servants who are not 63 years of age and have applied for retirementcertain restrictions will be imposed. His/her annual retirement rights will be permanentlyreduced by 3% for each year of length of service before age of 63. This is to discourage earlyretirement and promote extended career.

Early retirement example – Rashidullah

Rashidullah rer es at 58 year s of age so hi s final benefit wi ll be reduced by five year s

be reduced by 3% for each year. 3% me s 5 year s eq uals 15%. Rashidullah’s pension will bereduced by 15%.

This calculation of pension is based on the final wage. When pension is calculated, followingstandard formula, it is then reduced by 15%. So, if the pension of Rashidullah was calculatedas Afs 45,000; his actual reduced pension will be Afs 38,250 for life.

Responsibility to calculation reduction in pension will be with the Pension Department andapplied at the point of actual claim of the first pension at the Pension Department,considering age of that individual at that particular time.

This provision on reducon shal l not appl y to emp l oyees wh o have comp l et ed 40 year s ofactual service or disabled.

Incentive for deferral of retirement

The following provisions will start to apply five years after the promulgation of the Pensionto all cases of voluntary retirement where individual decided

to defer pension unl aer age of 65.

Where employee’s contract is extended based on need of the relevant organization andhis/her agreement, in this case his/ her pension benefits shall be increased by 3% for eachextra year of service over age of 65, but not exceeding maximum of 80% of the Final Wage.

Category 4: Death, missing, disability, or continuous illness that disrupts the civil servant towork

In event of the death of a civil servant, or who goes missing or suffers disability or continuous illnessthat disrupts the civil servant to work, the following definitions or clarifications are applicable fordetermining retirement in this category.


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A. Death

The Regulation provides survivor pension benefits under certain circumstances for eligiblebeneficiaries upon the death of a civil servant or retiree.

There are three types of death conditions and pension benefit will vary: (i) normal death (or deathnot associated with job) of the civil servant, (ii) death due to work conditions or accident at work ofthe civil servant, (iii) any death of the pensioner.

Normal Death of the Civil Servant

Upon the death of an employee prior to retirement and or leaving the job, his/her survivorsshall be paid as follows:

1- In cases where his/ her length of service is 1 to 10 years, his/ her survivors shall bepaid an amount equal to 12 me s of the Fi nal Wa ge and al lowa nces , as i ns tal lme nt s or alump sum payment as pension benefit.

2- In cases where his/ her length of service is more than 10 and up-to 25 years, his/her survivors shall be paid an amount equal to 36 me s of the Fi nal Wage and allowances, asinstallments or a lump sum payment as a pension benefit.

3- In cases where his/ her length of service is more than 25 years, his/ her survivorsshall be paid an amount equal to 60 me s of the Fi nal Wa ge and al lowa nces , as installmentsor a lump sum payment as a pension benefit.

Death Due to work conditions of the Civil Servant

Upon the death of an employee during the execution of their work, prior to retirementhis/her survivors shall be paid and amount equal to 60 me s the Final Wage. The benefit ispaid either as a series of installments or as a lump sum payment. This type of pensionpayment does not take into account his/her length of service when making the calculation.

Death due to accident at work example: Sharifullah

Sharifullh was killed in an accident that happened at the site of a construction of a newschool that he was inspecting. His annual salary, including allowances at the time was 28,000Afs. The final calculaon for hi s deat h rel at ed pens i on is 48, 000 me s 60. The final amo untreceived by his survivors is 1,680,000 Afs and it is only one claim from the family that will beaccepted.

Death after retirement


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Upon the death of an employee after retirement, his / her survivors shall receive an amountequal to 36 me s of the pens i on benefit as an ins tal lme nt s or a lump sum payme nt .

Death after retirement example: Wahidullah Amir

Wahidullah Amir died from heart aa ck at age 67 . He had only recently retired from his jobas an engineer with the Ministry. His wives and children made a claim to access the postretirement pension benefit.

Wahidullah Amir was being paid 20,000 Afs per month as his pension. The final calculaon ofhis death related payout was based on 36 me s hi s pens i on , which equals 720,000 Afs.

Survivors of the deceased are determined based on legal documents.

The following legal documents are required:

a) Death Certificateb) Legal Inheritance Letterc) Power of Attorney

Pension benefits are paid to the nominated legal survivor and divided equally among the survivors.

The nominated legal survivor is identified and decided by all survivors in cooperation with therespective Basic Court in the place where civil service employee was living. The same Basic Court isresponsible for issuing the Power of Attorney to the nominated survivor or appointed attorney.

Only one claim from family will be accepted. All other claims will be rejected.

Pension benefits are paid to the nominated legal survivor and divided equally among the survivors.

The following table provides a summary of the types of eligible survivors of the deceased civilservant.

Type of survivor DescriptionWidow / Widower Wife, husband

Children Unmarried daughter(s), son(s) under the age of 18, or coupledwith education or disability or have constantly illness preventthem to work or bound to complete the military service

Parents Father and mother subject to that the employee had beenresponsible for his/her support/ custodianship

Brothers and Sisters Unmarried sister(s), brother(s) under the age of 18, or coupledwith education or bound to complete the military servicesubject to that the employee had been responsible for his/hersupport/ custodianship and the foetus of the deceased femaleemployee, born alive


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B. Missing

Pension benefits of a civil servant who goes missing for more than 4 years, his/her survivors shall bepaid an amount equal to thirty-six (36) me s hi s/her final wage [PUT IT IN DEFINITION IF YOU WANTSO IT APPLIES TO ALL REFERENCES TO FINAL WAGE, INSTEAD OF MENTIONING IT EACH TIME.] ofhis/her grade in accordance with the legal certification as a lump sum payment and or as fixed-period installments.

C. Disability Retirement

There are two types of disability retirement applicable to this category:

1. work related disability of a civil servant2. disability caused other than those work related

These two categories have been further divided into full and partial disability:

The benefits range from fifty to eighty percent (50% to 80% of the Final Wage) regardless ofthe actual length of service in the case of work related disability.

The benefits range from thirty to fifty (30% to 50%of the Final Wage) in case of non-workrelated disability. Actual length of service will be taken into account in this case.

A Civil Service employee who is disabled for causes other than those related towork, shall be eligible for a disability pension and will be paid as follows:

In the case of a disability of 70% or more and where the length of service is 25years or more, s/he shall receive pension rights according to Article 10,para 3 ofthis Regulation.

2. In case of a disability of 70% or more and where the length of service isless than 25 years, he shall receive equal to 50% of his Final Wage.

3. In case of a disability of 30% or more but less than 70% and where thelength of service is 25 years or more, he shall receive equal to 50% of his FinalWage.

4. In case of a disability of 30% or more but less than 70% and where thelength of service is less than 25 years, he shall receive equal to 30% of his FinalWage.

A civil servant may be eligible for disability retirement if she/he becomes disabled for useful andefficient service. Disability means a civil servants inability, because of disease or injury, to perform


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satisfactorily and efficiently the duties of hers/his position. Significant medical documentation isrequired prior to approval of a disability pension. The retirement of a civil service employee in caseof disability or illness is approved based on certification by a health panel of disability determinationor authority of the Ministry of Public Health.

The Directorate for Monitoring of Implementation of Health Regulations, Ministry of Public Health(MoPH) in Afghanistan constitutes the Certification Panel. The Panel is comprised of seven specialistdoctors from the different hospitals in Kabul. The Panel certifies and decides on pension disabilitycases. The Panel is constituted quarterly and holds weekly sessions at the MoPH, Great MasoudSquare, Kabul.

Provincial disability certification is provided by local health clinic within each province. The provincialhealth clinics send their findings to the Certification Panel, MoPH,Kabul for their final and bindingdecision.

Also:

Disability conditions of the disability pensioner shall be reviewed every three (3) years by the sameMoPH Certification Panel.

If s/he is capable of employment after disability, s/he is deprived of their pension benefits untilreaching other retirement conditions/categories or when disability gets re-certified.

A disabled retired person is also deprived of disability pension benefits if:

a) He/she is capable of employment after disabilityb) The disability is due to addiction to narcotics and intoxicantsc) When medical history establishing disability is deliberately forged

Disability pension shall be paid with no deduction irrespective of age.

Category 5: Severance (suspension, forced resignation and absence from the work, workingoutside of the civil service grades and end of suspension with pay period)

Civil service employees classified under the category of severance are eligible for pension benefits.The separate instructions on severance issue will be provided by the IARCSC.

6. DETERMINING ACTUAL LENGTH OF SERVICE

Actual length of Service includes the total years and months of all periods of employment in the civilservice of the Government. All civil servants who been employed according to the old pay scalesqualify to their years of service under the old scheme counted and added to their years of serviceunder the new pay and grade scheme of IARCSC. That is, when the actual length of service iscalculated the entire period of service under the old and new pay scales will be considered as theactual length of service.


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While determining the actual length of service of a civil servant, six months length of service or moreshall be regarded as one year of service, and less than six months will be not taken in consideration.

Example 1 – less than six months serviceIf a civil servant has worked for twenty-five years and five months his/her actual length of service intotal will be twenty-five years.

Example 2 – six months serviceIf a civil servant has worked for three years and six months his/her length of service in total will befour years.

Example 3 – more than six months serviceIf a civil servant has worked for seven years and eight months his/her length of service in total will beeight years

7. COVERAGE OF PENSION BENEFITS

Under the Regulation the following public employees qualify for civil servant employee pensionbenefits:

Civil service employees of Ministries, Attorney General Office, General IndependentOrganizations, Independent Commissions, State Owned Enterprises, Administration sectionsof Upper and Lower Houses (Parliament), permanent and contract civil service employees ofthe Judiciary and mixed companies in which the share of Government ownership is morethan fifty percent

Academic professors of Higher Education Institutions and Academy of Science ofAfghanistan.

Civil service employees, those are working with agreement of the Government in accordancewith the civil service posts in political / cultural agencies, councils and other Afghaninstitutions abroad or in United Nations agencies or other International Organizations.

High ranking government officials. Ministries and Independent Organizations pertaining to military. And their survivors of the preceding categories where survivors are the persons that are

eligible for the pension benefits of a civil servant employee upon his/her death.

8. PENSION CONTRIBUTIONS

Under the new Regulation the following applies:

The pension contribution is comprised of both civil servant’s and the organization’s contributions.


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The contribution of the civil servant is equivalent to eight percent (8%) of the employee’s monthlywage and the allowances provided to the post.

The contribution of the organization to the pension treasury is equivalent to eight percent (8%) ofmonthly wage along with allowances provided to the post

No tax is imposed on pension contributions.

The Ministry of Finance, Treasury, will issue additional instructions on how to make pensioncontributions according to the new Pension Regulations for The Civil Service Employee ofAfghanistan.

9. PENSION CALCULATION

Pension will be calculated on the basis of the actual length of service of the civil servant, the averagebasic salary of the civil servant over the last three years of service and the accrual rate which is twopercent (2%) per year. In all cases, pensions cannot exceed eighty percent (80%) of the final wage.

HOW TO CALCULATE THE FINAL WAGE

The Final Wage is defined as average of the monthly wage and allowances over the final three(3) years of actual service, taking into account annual increases in wages.

Final Wage calculaon examp l e 1 : Rashid

The most important point to remember is that the Final Wage is an average calculated overthree years only.

In 1387 Rashid was paid 8000 Afs per month. His posion wa s Gr ade 5, Step 1.Rashid’s total salary for 1387 was 96,000 Afs. 8000 Afs mulpl y by 12 (mo nt h) equal s 96000Afs

Next year, 1388, Rashid was promoted from Step 1 to Step 2, Grade 5. His salary increasedto 8,300 Afs per month.His total salary for 1388 was 99,600 Afs. 83 99600 Afs

In 1389 Rashid was promoted to Step 3, Grade 5. His salary was now 8,600 Afs.His total salary for 1389 was 103,200 Afs. 8600 Afs mulpl y by 12( mo nt h) equal s 103200 Afs

Rashid’s total salary for the final three years of service equals 298,800 Afs. To calculate theaverage, divide the final salary by the total number of months of service.

298,800 Afs divided by 36 months equals a Final Wage of 8,300 Afs.


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However, in certain cases individuals will retire with less than three years on new wages afterPay and Grading reform. In such cases, Final Wage will be calculated on the basis of average for thatactual period of wage payments under Pay and Grading reform.

Final Wage calculation example: Muhannad

Muhannad worked as a senior administration officer in 1389 and in te beginning of that year hewas admitted on the new wage under Pay and Grading reform. As a Grade 4, his salary was9,900 Afs.In 1390, Muhannad’s Grade 4 increased to 10,400 Afs per month.In early 1391, he rer ed aer wor ki ng onl y t wo year s on Pay and Gra di ng scal es . So, his FinalWage will be calculated on only on the basis of the two years Muhannad worked, so it will be10,150 Afs.

Pension Calculation in the Interim period

After Pay & Grading reform has started in the organization, the period of at least next five years willbe treated as an interim pension period. The new Pension Regulation requires higher contributionsfrom civil service employees compared with the previous scheme; 8% compared with 3%.Consequently the final pension is higher under the new scheme. Civil Service employees who workfor longer under the new scheme will receive a higher pension than those who have worked for ashorter time under the new system. 2

It is important to note that the interim period is not the same for everyone. The length of the interimperiod depends on when Pay and Grading reform has started for each civil servant. That means thedate the civil servant signed the contract for their new position on the revised pay scale.

The following two case studies help explain the impact of different Pay and Grading contract startdates on pension calculations during the Interim Period.

Example1: Waheed

Waheed completed the Pay and Grading process on January 01 2008. His interim period, like allother civil servants, lasts for five years. Waheed’s interim period begins on January 01 2008 andfinishes on 31 December 2013.

Example 2: Samia

2 This interim period may be extended or reduced based on decision made by MOLSAMD, MOF and IARCSC


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Samia completed the Pay and Grading process on April 10 2009. She works with Waheed in the sameMinistry, but her Directorate participated in Pay and Grading after Waheed’s Directorate hadfinished.

Samia’s interim period is also five years, like all other civil servants. Samia’s interim periodcommences on April 10 2009 and finishes on April 09 2014.

The accrual rate during this period will be as follows:

If a civil service employee retires less than three years into the new Pay & Grading scheme, the FinalWage will be multiplied by the total previous length of service multiplied by one point four percent(1.4%)

Example 1

A civil service employee has worked for less than 3 years under the new Pay& Grading

Scheme. His Final Wage pay is Afs 7,260 and his length of service under the old scheme is 30years. His pension benefits are calculated as per the law, as follows:

If a civil service employee retires between four and five years into the new Pay & Grading scheme,the Final Wage will be multiplied by the total length of previous service multiplied by one pointseven percent (1.7%).

Example 2A civil service employee was recruited at Grade 4. Hers/his length of service under the newPay & Grading Scheme is more than 3 years but less than 5 years. Her Final Wage is Afs9,160. His length of service under the old grading system is 35 years. Her pension benefits arecalculated as per the law, as follows:

Afs 9,160

If a civil service employee retires after five years into the new Pay & Grading scheme, the Final Wagewill be mulpl ied by the tot al lengt h of pr evi ous ser vi ce mu l pl i ed by two per cent (2%) .

Example 3A civil service employee has worked under the new Pay & Grading Scheme for more than 5years and then retires. S/He finishes at Grade 3 level with a Final Wage of Afs-13,010. Hislength of service under the former pay system was 36 years. Hers/his pension benefits arecalculated as per the law, as follows:


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Pension Calculation in cases of short service

An employee who has worked for less than five years shall receive the lump sum payment of 2months of Final Wage per year of service and one who has worked between 5 to 10 years shallreceive the lump sum payment of 2 and a half months of Final Wage per year of service. Standardprocedure of application for pension benefit will be used by the HR officer.

10.PAYMENT OF PENSIONS

Following the approval of a pension application, the Pension Department of MoLSAMD will executethe pension benefits to eligible civil service employees or his/ her survivors.

The survivors

1. The survivors will be able to collect the benefits all at once (lump sum) or2. In Installments for fixed period, until all the funds for that pension benefit are exhausted

Civil service employees

1. The payment of the pension benefits to civil service employees will be made on regular basisas defined by MoLSAMD. The Government may issue additional instructions on payment ofpension benefits to some categories of pensioners in form of a lump sum.

Payment of pension benefits will be made by bank transfer by the MOF to the bank account ofpensioners. The first payment for everyone will be paid by cheque in case of the absence of a bankaccount.

11.PENSION APPLICATION PROCEDURE

1. Preparaon and submi ssi on of Pens i on Appl icaon file

Completing pension application file by a HR Officer is divided in two phases.

Phase 1 – Collecting all necessary information for compiling pension application file

Phase 2 – Completing Pension application File and submitting it to the Pension Departmentfor further processing

Phase 1

HR Officers will:


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a) 90 days before rer eme nt , fut ur e rer ee wil l recei ve f rom a HR Officer a Notificationof Retirement form (HRF-01) outlining the choices he/she has about their comingretirement. The HRF-01 will also contain informaon about any l iabi lies ( i f any) ,right to defer a pension and informaon that 15 days pr i or to thei r last day at wo r kthey will be contacted by relevant HR Officer who will help them complete theirpension application file.

b) Complete Application Form (HRF-03) and secure the approval from the authorizedrepresentative of the organization who has the delegated authority

c) In case of death or disability of an employee, the HRF-02 form is preparedimmediately upon occurrence of such case.

Phase 2

As soon as HRF-02 form is approved, the HR Officers will:

a) 15 to 30 working days prior to future rer ee’ s last day of wo r k a HR Offic er wi llinitiate the process of the application for retirement and him/her to complete theDeparture Clearance Form (HRF-02).

b) Complete Service Record Form (HRF-04)c) Complete the Payment Information Form (HRF-05) with existing bank details (if such)

or with all information needed to open new bank account for future pensioner. Thisform is sent to the Pension Department who will further communicate it to the MoF.

d) In a case of disability pension obtain from the employee a Disability Certificate fromthe Health Certification Panel and complete Disability Notification Form (HRF-06) inorder to inform the Pension Department about the type of disability.

e) In case of death, obtain death certificate from the surviving family of the employee,and where appropriate, certification for service related death

f) Obtain Copy of the Official ID Cardg) Obtain Copy of the Taskera ID Cardh) Obtain Copy of a Bank Card (account) if exists

In Kabul once the Pension Application file is completed, HR Officer is Sending completed fileto the Pension Department of MoLSAMD within 5 working days of its compleon. In theprovinces once the Pension Application file is completed, HR Officer is Sending completedfile to the Pension Department of MoLSAMD in Kabul on quarterly basis. All such transfersof documents will occur in batches and each batch will need to be numbered as[Organization Code]-[Date Of Transmission]

Retirement Application form (HRF-03) is made in 2 copies (one original and one copy). Uponsubmission of complete application file to the PD by a HR Officer, the PD Officer is verifyingthe complete file and, if complete and acceptable, stamping and dating the HRF-03 and


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giving back one copy to HR Officer as a proof that application has been received by thePension Department.

A complete application is an application that has NO missing documents or information.

A compliant application is an application that complies with all legislative and proceduralrequirements.

2. Electronic submission of the applicaon fil e

When IT system of the Pension Department becomes available to all organizations, thecorresponding HR Officers will be required to enter forms HRF-03, HRF-04, and HRF-05 onsuch system. When entered, the system will generate automatic Confirmation Number,which will need to be put on the forms prior to submission to the Pension Department foreasy verification.

The process consists of the following steps:

1. HR Officer submits a pension application file. Only one copy is required for eachdocument, except HRF-03 in which case two copies are required as one is stamped bythe PD and given back to the HR Officer.

2. Within 5 to 10 working days, Pension Department reviews the application to ensure it iscomplete and compliant with all regulations, including ensuring that all supportingdocuments have been filed, that it corresponds to the electronic entry, and thatindividual that is applying is eligible.

3. If the application is found to be complete and compliant, and the individual is eligible,the Pension Department will approve it by issuing Notification of Pension ApplicationFile Receipt Form (PDF-01). The Form will be sent to the HR Officer and will need to beforwarded to the applying individual. The form will have a unique number and thatnumber will need to be used for all future communications on that case with thePension Department.

4. If the application is found to be incomplete and/or non-compliant, Pension DepartmentOfficer sends a Notification of Receipt of Pension Application (PDF-01) to the relevantHR Officer, indicating the problem with the application. The HR Officer has 15 days torespond to the completeness and/or compliance issues.

5. HR Officer then re-submits the application (or its missing parts) to the PensionDepartment. If a new form needs to be submitted, the box “Correction” needs to bemarked at the top of the form.

6. Pension Department Officer reviews the application again to ensure it is completeand/or compliant, including ensuring that all supporting documents have been filed. Ifthe application is complete and compliant, Pension Department Officer approves it by


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issuing a Notification of Receipt of Pension Application (PDF-01) and accepts theapplication for further processing.

7. If the application remains incomplete and/or non-compliant, Pension Officer may call ameeting with relevant HR Officer (including other parties, if affected) to discusscompleteness and/or compliance issues and to set out a timeline for resolving theissues.

8. If step 7 took place, Pension Department Officer sends to the HR Officer a secondNotification of Receipt of Pension Application (PDF-01) that summarizes the issues thatwere discussed at the meeting, and sets out the agreed-upon steps that will be taken toaddress these issues.

9. If steps 7 and 8 took place, the HR Officer responds to Pension Department Officer’ssecond completeness and/or compliance Notification of Receipt of Pension Application(PDF-01) in accordance with the agreed timeline and re-submits the application file.

10. If steps 7 through 9 took place, Pension Department Officer reviews the applicationfor completeness and/or compliance, including ensuring that all supporting documentshave been filed. If the application is complete and compliant as described above, PensionDepartment Officer approves it by issuing Notification of Receipt of Pension Application(PDF-01) accepting and approving the application. If the application remains incompleteand/or non-compliant, Pension Department Officer issues a final Notification of Receipt ofPension Application (PDF-01) to refuse and reject the application. In this case the wholeapplication procedure needs to be repeated and restart from the first step.

SUSPENSION OF PENSION AFTER RE-JOINING SERVICE

a) When individual who is already retired decides to re-join the service, on a regularcontract, HR Officer will need to complete the Suspension of Pension Form (HRF-07)in order to inform the Pension Department of this change.

b) When individual who is already retired re-joins the service and suspends his pensionand after certain period decides to apply for retirement, his/her new pensionapplication needs to be submitted by relevant HR Officer and must include allprevious service history records. In this case his/her new pension benefit will berecalculated taking into account the new service period.

DEFERRED PENSION AND DEATH OF EMPLOYEE

Individuals may choose to defer the receipt of pension benefits following separation fromthe service and start receiving pension benefits at a later date. In such cases, the applicationfile must to be submitted to the Pension Department at the time of separation following allthe above procedures.

In cases when a uniform sector employee has deferred a pension but then died beforestarting to receive the benefit, the following procedure is applicable:


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(i) Family members of such individual will have to apply directly to the PensionDepartment. They may want to obtain assistance from the HR Officer if required (forexample, to obtain copy of the original PDF-01 form that was sent by the PensionDepartment to the HR Officer).

(ii) The Pension Department will process this application as a special case and will grantpension benefit on the basis of the survivorship provisions of the Regulation.

General information

All new forms will be printed and distributed for free to all relevant uniform sectororganizations by MoLSAMD. All new forms will be printed in two official languages of IslamicRepublic of Afghanistan (Dari and Pashtou). In case of shortages of forms relevantorganization needs to approach the Pension Department in Kabul and order new supplies.

It is the Pension Department responsibility to calculate and award pensionbenefit in accordance to the Manual for Pension Department prepared byMoLSAMD.


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Flow Diagram of Pension Application Procedure for HR Officers

Civil service employees

HR Officer prepares issuesNotification of Retirement to eligible

civil service employee (HRF-01)

HR Officer Issues prepares and hasapproved Pension Application Form

(HRF-03)

HR Officer Issues prepares and hasapproved Service Record Form

(HRF-04)

HR Officer prepares Service RecordForm

(HRF-04)

HR Officer prepares and has approvedDeparture Form (HRF-02)

HR Officer prepares PaymentInformation Form

(HRF-05)

MoLSAMD Pension DepartmentKabul

Future Pensioner receives, acceptsand acknowledges Notification of

Receipt of Pension Application (PDF-01)

In a case of disability pension, HROfficer prepares Disability Notification

Form(HRF-06)

In a case that Retiree re-joins a service,HR Officer prepares Temporary

Suspension of Pension Form(HRF-07)


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12.APPEALS

If the civil service employee or their survivor/s are dissatisfied with the pension decision they maycomplain directly to the Appeal Commission.

The Appeal Commission comprises three members from MoLSAMD and two members from IARCSC.The Commission will be formed when required to address the complaints of the civil serviceemployee or their survivors regarding the calculation and payment of pension benefits.

The appeals commission will meet not less than quarterly and such meetings will be officially calledby the Deputy Minister of Labor [PLEASE DISCUSS WITH BASHIRI!!!]. The Commission will designate asecretariat with such appeals will have to be submitted.

If the civil service employee or their survivor/s are dissatisfied with the decision made by the AppealCommission they may complain to the court.

13. QUESTIONS AND ADDITIONAL HELP

The Pension Department will designate a special telephone line where all inquiries regarding theapplication process, eligibility cases, and benefit calculations can be submitted. The MoLSAMD willnotify in due course on the telephone number and hours of operation

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