Frequently Asked Questions

Frequently Asked Questions

DOES AN EMPLOYEE WHO HAS 3 YEARS AND 1 MONTH TO RETIRE COME UNDER THE OLD SCHEME OR THE NEW SCHEME?

Any employee with more than 3 years to retire comes under the new pension scheme.


HOW CAN I KNOW WHAT IS HAPPENING WITH MY MONEY?

Pension Fund Administrators (PFAs) will issue regular statements of accounts and profit from investments to the employees.


HOW IS THE NEW SCHEME TO BE REGULATED?

The National Pension Commission is empowered by the Pension Reform Act 2004 to supervise and regulate new pension scheme.


WHAT IS PROGRAMMED WITHDRAWAL?

A programmed withdrawal is a method by which the employee collects his retirement benefits in periodic sums spread throughout the length of an estimated life span.


WHAT HAPPENS TO MY RSA WHEN I CHANGE JOBS?

The RSA remains with the PFA of your choice for as long as you want. You simply notify your new employer of the details of the PFA that manages your account and thereafter your contributions will be sent to the custodian of the PFA.


IS THE NEW PENSION SCHEME MANDATORY FOR ALL CATERGORIES OF EMPLOYERS AND EMPLOYEES COVERED UNDER THE ACT?

The new pension scheme is mandatory for all categories of employers and employees covered under the Pension Reform Act.


ARE PENSION CONTRIBUTIONS TAX FREE?

Contributions to the new pension scheme are tax free.


WHAT IS AN ANNUITY?

An annuity is an income purchased from an approved life insurance company which provides monthly or quarterly income to the retiree during his/her lifetime.


WHAT HAPPENS TO THE PENSION FUNDS CONTRIBUTEDUNDER THE NIGERIAN SOCIAL INSURANCE TRUST FUND(NSITF) BEFORE THE NEW PENSION SCHEME?

The pension funds contributed to the NSITF before the commencement of the new pension scheme including the income shall remain with the NSITF for a minimum period of five years from the commencement of the Pension Reform Act 2004. NSITF shall establish a company to be licensed by the National Pension Commission as a PFA […]


IS THE PRIVATE SECTOR PENSION BEING MERGED WITH THE PUBLIC SECTOR?

There is no merger of private sector pension with that of the public sector pension since the sources of funding are not the same. However, both are now being regulated under the same rules and regulations.


WILL TAX BE PAID ON THE PROFIT MADE FROM TRADING WITH THE MONEY IN THE RETIREMENT SAVINGS ACCOUNT (RSA)?

Tax will be paid on the profit made from trading with the money in the Retirement Savings Account.


WHO IS A PENSION FUND ADMINISTRATOR (PFA)?

A Pension Fund Administrator (PFA) is a company licensed by the National Pension Commission to manage and invest the pension funds in the employee’s Retirement Savings Account (RSA).


WHAT HAPPENS WHEN AN EMPLOYEE WHO HAS BEEN CONTRIBUTING UNDER THE NEW SCHEME DIES BEFORE HIS RETIREMENT?

Where an employee who has been contributing under the new pension scheme dies before his/her retirement, his retirement benefits shall be paid to his beneficiary under a will or the spouse and children of the deceased or in the absence of a wife and child, to the recorded nextof-kin or any person designated by him […]


CAN A CONTRIBUTOR MOVE HIS CONTRIBUTIONS UNDERNSITF TO ANOTHER PFA?

A contributor or beneficiary under NSITF Act can only move his pension contributions under NSITF to another PFA after a period of 5 years from the date of commencement of the Pension Reform Act 2004.


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