Private Organization Employees Pension Proclamation No. 715/2011

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Download Private Organization Employees Pension Proclamation No. 715/2011

WHEREAS it is part of the country’s social policy to expand the social security system and reach citizens step by step;

WHEREAS the strengthening and sustainability of the system greatly contributes to social justice, industrial peace, poverty reduction and development;

WHEREAS it has been found necessary to put in

place private organization employees pension scheme;

NOW, THEREFORE, in accordance with Article 55(1) of the Constitution of the Federal Democratic Republic of Ethiopia, it is hereby proclaimed as follows:


This Proclamation may be cited as the “Private Organization Employees Pension Proclamation No. 715/2011”.

2. Definitions

In this Proclamation, unless the context otherwise requires:

1/“private organization employee” means a salaried person permanently employed in any private organization;

2/“permanent employee” means an employee hired for an indefinite period in accordance with the definition assigned to it under the Labour Proclamation No. 377/2003;

3/ “private organization” means an organization established to engage in commerce, industry , agriculture, construction, social service or in any other lawful activity and which has salaried employees and includes charities and associations;

4/“government” means the federal government and includes the regional states of the Federal Democratic Republic of Ethiopia;

5/“region” means any state referred to in

Article 47(1) of the Constitution of the Federal Democratic Republic of Ethiopia and includes the Addis Ababa and Dire Dawa city administrations;

6/“private service” means service rendered by employees of private organizations;

7/“benefit” means retirement pension, invalidity pension, incapacity pension or survivors’ pension and includes gratuity and the refundable pension contribution;

8/“salary” means monthly salary received by the employees of private organization, for services rendered during regular working hours without the deduction of any amounts in respect of income tax or any other matter;

9/“beneficiary” means an employee of private organization or his survivor who receives benefits or fulfils the conditions for receiving benefits in accordance with this proclamation.

10/“survivor” includes persons mentioned under

Article 39(3) of this Proclamation;

11/“private organization employees pension scheme” means a system established to pay benefit and provide service to employees covered by this Proclamation;

12/ “pension fund” means fund established for the purpose of collecting pension contributions and effecting benefit payments pursuant to this Proclamation;

13/“Agency” means the Private Organization

Employees Social Security Agency established by the Council of Ministers Regulation No. 202/2011;

14/“person” means any natural or juridical person;

15/any expression in the masculine gender includes the feminine.

3. Scope of application

Without prejudice to the appropriate provisions of the Proclamation No. 270/2002 that provide pension coverage to foreign nationals of Ethiopian origin and international agreements to which the country is a party, this Proclamation shall be applicable to employees of private organizations who are Ethiopian nationals.

2/ Notwithstanding the provision of sub-article

(1) of this Article:

a)employees, who have pension scheme or provident fund before the coming into force of this Proclamation, may either decide to continue to benefit from the pension scheme or the provident fund or agree to be covered by this Proclamation;

b)employees of religious organizations and political organizations and persons engaged in the informal sector shall, upon their consent, be covered by this Proclamation.

3/ Notwithstanding the provision of sub-article

(1) of this Article, this Proclamation shall not be applicable to:

a)domestic workers; and

b)employees of governmental international organizations and foreign diplomatic missions.

Download Private Organization Employees Pension Proclamation No. 715/2011

Download Private Organization Employees Pension Proclamation No. 715/2011     

33 replies »

  1. Dear Abrham :- Greetings !
    here I need clarification on private organization employees pension contribution rules and regulations, I am 58 years old I am working for one private organization for the last 35 years, but I am not yet part of pension fund contribution, but now the new private-organization-employees-pension-proclamation is announced by the government, to be part of this new proclamation is it possible paying the last 35 years back pay pension contribution both employees and employers share plus bank interest to be part of this government pension.

  2. i can get more information about private contract employee how and when starting deduction of Pension Fund i.e Employee sign contract for 3 or 6 months . can some one will tell more information about my above questions thanks

    • i cann’t get more information about private contract employee how and when starting deduction of Pension Fund i.e Employee sign contract for 3 or 6 months . can some one will tell more information about my above questions thanks

  3. Does it is applicable the penality to pay apenssion that is not paied before the proclamation of penalty scheme schemee??????

  4. Pls does it have a penality if some one wants to pay a pension that is not paied before the proclamation Of the penality and schemes of 2007

  5. Just a quick question: I served government organization for 15 years and now am working in private organization for about 4 years,of course incorporated with private employee pension package and have pension ID too. Is there any mechanism that my government pension ID linked with private one? What rights do I have if I am interested to quit my job?


  6. I appreciate your efforts to make any one know important laws, policies and relating things. I’m a civil servant in a private limited company which is one of the many subsidiaries of a parent company. It has many sister companies. All sisters are Private limited companies. I was working for the parent company before I came to the new company I’m working for now. I join the new company by internal transfer mode of employment from the parent company. When I was in the parent company, I was entitled to provident fund. The management of the new company, however, obliged me for pension scheme. I claim that since I came through transfer (not a new employee), I should continue with provident fund instead of pension. What can you advice me, sir Abreham. Pls consider the following factors;
    1) The new company is a private limited company
    2) I was entitled for Provident fund When I was working for the parent company 3) I came to the new company through internal transfer (I’m not hired as new employee)

  7. Hi Abrish I have question about aluwanse for what job how many payed please verify about this detail

  8. is it applicable for an employee who worked for less than 45 days you didnt answer this question

  9. Hi dear Abraham!
    Would you kindly please let me know:
    1) Hardship allowance location in Ethiopia & their payment rate
    2) For how long period of time employed person is subjects to pension contribution in private organizations through my email (nglhr.fin@gmail.com)

    All the best

  10. hey,i was wondering if you can help me with the private employment agency’s proclamation. Is it applicable to those agencies that recruit and higher people to different local organizations and persons too?

  11. Hi Abresh,I am from Afar state of Aysaita and my confusion about privet company pension is when the deduction start,at the time of employment,45 days after or at employment month full liable ? pleas clarify me about the fact mentioned above

    Thank you

  12. As a foreign company resently established in Ethiopia, are we supposed to register for Social Security before we employ locals or as and when we employ locals then we register. Please advise.

  13. Dear Abraham
    Please help me to get some issues of the proclamation.
    I am employed to an organization in August, after the new proclamation. I do not want pension, but it seems pension proclamation is an obligation rather than right.

    What can i do? Do i have a right to choose between provident fund and pension?

    • The private Organization Employees Pension Proclamation is applicable to all permanent employees irrespective of their choice. The option to choose between pension scheme and provident is available only to employees, who have pension scheme or provident fund before the coming into force of the Proclamation.

      If the duration of your employment contract with your organization is not for a definite period of time i.e. if you are not a permanent worker the pension proclamation is not applicable and you have the right to request your employee not to deduct pension contribution from your salary.

  14. certainly like your web-site but you need to test the spelling on several of your posts. Many of them are rife with spelling issues and I to find it very bothersome to tell the truth then again I’ll certainly come back again.

    • I think you should forward this comment to the law maker i.e. House of People’s representatives. The spelling error appears on the published version of the proclamations. I have no authority to correct that.

  15. Hi Mr.Abrham I am one the student of Adama University in department of Business administration i just preparing graduation paper about The pension and social security of Ethiopia low and its impact in privet sector
    so could you help me by giving sufficient information about the proclamation and other necessary information thank you

    • Hi Eyob,

      My name is Erna. I am the communications officer at HelpAge International in Ethiopia. We are working closely with goverment and other stakeholders by participating actively in the National Protection Platform Forum. HelpAge has partners and affiliates in over 70 countries working and sharing information on the subject you are writing your paper on. If you could provide your email to erna@helpageethiopia.org, I would be able to share more general as well as specific information to Ethiopia.
      Until you do, here is the link to our website http://www.helpage.org.

      Best wishes,

      • Thanks for visiting this blog. I would also be interested in getting additional information on the subject to share it on this blog. may I kindly ask you if that is possible?

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