Tabung Amanah Pekerja (TAP) and Supplemental Contributory Pensions (SCP) are both government initiated pensions schemes. One of my earliest posts was about them! This scheme is applicable to Bruneian citizens and permanent residents. What I didn’t talk about in detail was how you can calculate TAP and SCP contributions. And to be honest, you don’t need to be some maths genius to do it!
What you need to calculate TAP and SCP contributions
Let’s dig right in, shall we? To calculate TAP and SCP, you will need:
- Your pay slip – you should know the exact amount of your basic salary,
- Pen and paper or Microsoft Excel,
If you’re using Excel, I’m going to assume you know how to input the formula to do the calculations. If not, do let me know.
Know the rates to calculate TAP and SCP contributions
Your contributions are set by law to a minimum of:
TAP = 5% of your basic salary
SCP = 3.5% of your basic salary
Your employer is also legally obligated to match TAP at 5% and SCP at 3.5%. Therefore, you should have 10% going into your TAP account and 6% going into your SCP account.
Wait… SCP is not 7%?
Surprise! The 1% from you and your employer goes into what’s called the “Survivorship Protection Fund”. Check out my previous post for more about this benefit.
Calculating your TAP
Now that we know the rates of how much you should contribute, the calculation is very simple:
TAP Contribution = Basic Salary × (5÷100)
So for example, if your basic salary was $500, your contribution will come to $25 per month. Again, this will be matched by your employer so the total going into your TAP account should be $50.
Things to note
- Check your TAP account from time to time and make sure everything is in order. The contribution should be done by your employer; they will deduct your 5%, add their 5%, and submit to TAP on your behalf.
- The contribution should only come out of your basic salary. That means, by right, bonuses and allowances are not subject to deductions. E.g. $500 salary with $50 travel allowance will have a contribution of $25 (5% of $500); NOT $27.50 (5% of $550).
Calculating your SCP
SCP is a bit special but the calculation itself is similar to TAP, so it’s pretty easy:
SCP Contribution = Basic Salary × (3.5÷100)
Following our earlier example, if your basic salary was $500, your contribution will come to $17.50 per month. Again, this will be matched by your employer to become $35.
BUT the total going into your SCP account will only be $30 because $5 (or 1% of basic salary) goes to the survivorship benefit.
Special benefits of SCP
Here’s where it gets interesting. SCP is a special little scheme with added benefits such as:
1. Minimum contribution is $17.50
This means your 3.5% contribution has to be at least $17.50; where $15 goes to your SCP account and $2.50 goes to the survivorship benefit. So what happens if you earn less than that? Well, the Government of Brunei will top-up the shortfall.
For example, if a person earns $400, their 3.5% will be $14. In this case, the Government will top-up the additional $3.50 to make it $17.50!
This is written under the Supplemental Contributory Pensions Order, 2009, section 8(10).
So you are your own boss, no one tells you what to do. But that also means you don’t get a matching TAP contribution! Fortunately, SCP allows you to have a small benefit here:
You may voluntarily contribute $17.50 to SCP and the Government is nice enough to match you!
Cite: Supplemental Contributory Pensions Order, 2009, section 9
Things to note
- Similar to TAP, do check your SCP from time to time and make sure everything’s good.
The way to calculate TAP and SCP contributions are simple mathematics. Employers and employees are legally obligated to contribute 5% to TAP and 3.5% to SCP respectively. At the end of the day, you should have 10% going into TAP and 6% going into SCP monthly. There are also special benefits for SCP which I’m sure some people can utilise as well!
If you’re interested to learn more about these schemes, drop by TAP’s branches and speak to their staff!
Power has only one duty – to secure the social welfare of the People.
– Benjamin Disraeli