Frequently Asked Questions

Frequently Asked Questions

WHAT IS THE MAIN OBJECTIVE OF THE NEW PENSION SCHEME?

One of the main objectives of the pension reform is to ensure that every person that worked in either the public or private sector in Nigeria receives his/her retirement benefits as and when due.


HOW WILL I BENEFIT FROM THE NEW PENSION SCHEME?

The new pension scheme will ensure that you receive your pension after retirement without any delay.


HOW DO I KNOW WHICH PFA TO CHOOSE?

The National Pension Commission will publish a list of all licensed PFAs and make it available to the public.


WHAT HAPPENS TO THE BALANCE IN THE RSA AFTER ANY INITIAL LUMP SUM WITHDRAWAL?

The balance in the RSA will be used to procure an annuity that provides regular income to the contributor or fund a programmed withdrawal.


CAN NSITF STILL HANDLE PENSION MATTERS UNDER THENEW PENSION SCHEME?

NSITF will only handle pension matters of existing pensioners and those exempted by the Act who have contributed to the NSITF under the supervision of the National Pension Commission.


HOW IS THE NEW PENSION SCHEME DIFFERENT FROM THE OLD PENSION SCHEME?

Most of the old pension schemes were not fully funded. Therefore, upon retirement, there were no ready funds to pay the pensioners. The new pension scheme is fully funded. Money is contributed into individual employee’s Retirement Savings Account (RSA) and when he/she retires, there will be money in his/her RSA to pay his pension.


HOW CAN I BE SURE THAT MY CONTRIBUTIONS ARE SAFE?

All those managing or keeping custody of pension funds and assets will be licensed and continually regulated and supervised by the National Pension Commission.


CAN A PFA HAVE ACCESS TO THE MONEY IN MY RSA?

The Pension Fund Administrator cannot collect or spend the pension money in the RSA.


WHAT IS THE RETIREMENT AGE UNDER THE PENSION REFORM ACT 2004?

The Act did not stipulate any retirement age. It depends on each employee’s terms and conditions of employment.


WHAT WILL HAPPEN TO NSITF AFTER COMING INTOFORCE OF THE ACT?

NSITF will continue to provide social security services other than pension to the country.


WILL PRIVATE SECTOR PENSION SCHEMES BE ALLOWED TO CONTINUE?

Private sector pension schemes will be allowed to continue provided if there is evidence to show that the pension scheme is fully funded at all times, any shortfall made up within 90 days, pension funds assets are segregated from the assets of the employer/company, the pension funds assets are held by a licensed Custodian and […]


WHAT IS THE GUARANTEE THAT THE PENSION FUNDS UNDER THE NEW SCHEME WILL BE WELL MANAGED AND NOT DIVERTED FOR OTHER PURPOSES?

The functions of the Pension Fund Administrator (PFA) and Custodian are clearly spelt out in the Pension Reform Act 2004. The Act provides adequate safeguards against the misuse of the pension funds and assets by any operator.


WHO IS A ‘CLOSED PENSION FUND ADMINISTRATOR (CPFA)’?

Any employer managing its existing pension scheme before the enactment of the Pension Reform Act 2004 may apply to the National Pension Commission to be licenced as a Closed Pension Fund Administrator to continue to manage such pension scheme. A closed PFA cannot open or manage RSA for employees other than its employees or employees […]


WHAT IS THE MINIMUM PERIOD REQUIRED BY AN EMPLOYEE TO QUALIFY FOR PENSION UNDER THE NEW SCHEME?

There is no qualifying period for pension. If an employee works for an employer for one month, his pension contribution will be paid by the employer into the employee’s Retirement Savings Account (RSA) for that month.


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