The normal retirement age is a member's 60th birthday. This however may be increased or reduced. A member of staff can elect to withdraw his/her service after putting in a number of years service. An employee who withdraws his/her service after working for ten years will be entitled
to 100% of his terminal salary as gratuity. The employee will not be entitled to pensions. If however, an employee withdraws his service after putting in fifteen years service, he/she will be entitled to both gratuity equal to 100% of his terminal salary and 30% of his terminal salary as pensions. The pensions rights will not however be paid until the employee attains the age of forty-five years. Readers are to note that payments made as gratuities are not taxable whereas payments to retired employees are taxed at the relevant tax rates.
Risk and Uncertainty
Since the future is uncertain, it is wise to make allowances for risks and uncertainty
Note the following points regarding risks and uncertainties:-
- Risk exists where there are several possible outcomes and there are material statistical evidence relating to them.
- Uncertainties exist where there are several possible outcomes but there are little previous statistical evidence to guide the decision maker in predicting them.
In the application of risk analysis, two points should be borne in mind. Firstly, the quality and amount of information available and secondly the magnitude of the project to be undertaken. The quality of information cannot often be determined and sophisticated analysis can be costly because of the cost of data collection). Simple approaches such as sensitivity analysis, or risk discounting or even payback period with discounting should not be completely discarded.
Managers in many cases do not consider attaching probabilities when forcasting costs and revenue. However, forcasting in this way is not an easy task. An approach adopted by some companies to overcome this barrier to probability estimates is to interprete the forcasts in terms of confidence levels.
For example, a manager who states that he believes that he can sell 1,000 units of a product in a planning period at a given
price will be asked to attach a confidence level to this estimate. The manager might feel that he is sufficiently confident to state that he will achieve this level on at least seven occasions out of ten. He can then be asked if he thinks he can sell 1,250 units; there might be a slight chance of this, say one chance in ten. The chance of selling 850 units might be thought to be very high, say on at least nine occasions out of ten. Out of these confidence levels, an estimated probability distribution for this one variable can be formed.
Similarly, confidence levels might be obtained for all uncertain variables in a project. If a company decides to adopt this approach to uncertainty in its capital investment decision, there are a number of computer programs available to handle the problem for the company.
Most computer companies can offer packed capital investment programs
that allow for uncertainty. Most of these allow for some estimates of probability to be attached to the variables.
It will be relevant to mention that certain high risk projects may be
worth undertaken if they would result in high returns at times when other projects are giving only low returns.
@tipu curate
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Hello friend, thank you for sharing this publication, retirement seems to me a very interesting topic, the truth is that many people worry about it and always think about when retirement comes. I do not believe that it is completely wrong because it is something that by right corresponds to them, but I think that we should think more about investing in other things so as not to depend only on a pension, particularly in my country a pension is not useful for anything, nor to be able to make a good market, something that seems to me really sad. So many years worked for the end not to receive anything in return, so we must think beyond and not stay with what is supposed to be safe.