Fixed contributions (Contributory):
- These are contributions made regularly and mandatorily.
- They are mandatory when joining.
- Generally, these contributions are tax-deductible, meaning they can reduce the amount of taxes you owe.
- They are specifically earmarked for your retirement and therefore subject to specific regulations on how they can be used.
Voluntary contributions (Non-contributory):
- These are additional contributions you can make beyond the mandatory fixed contributions.
- They are not mandatory when joining.
- Generally, these contributions are also tax-deductible, meaning they can reduce your tax burden.
- They are flexible, and you can decide how much and when to make these contributions based on your own financial circumstances and savings goals.
- They can be useful for increasing your retirement savings or for other long-term financial goals.
In summary, fixed contributions are mandatory, while voluntary contributions are optional and dependent on your personal choice, but both have the same tax advantage.