The PFA manages and invests the pension funds while the PFC keeps the pension funds and assets in safe custody and carries out transactions on behalf of the PFA.
The Federal Government has established a Retirement Benefits Bond Redemption Fund Account in the Central Bank of Nigeria. The Federal Government is already making a monthly payment into the Fund of an amount equal to 5% of the total monthly wage bill payable to all employees of the Federal Government and the Federal Capital Territory.
Every employee or contributor under the new pension scheme is expected to open RSA in his/her name with a PFA of his/her choice into which all his/her contributions and returns on investment are paid.
The minimum pension guarantee shall be determined from time to time by the National Pension Commission.
An applicant PFA must have a minimum paid up share capital of N150,000,000 while an applicant PFC must have a minimum paid up capital of N2,000,000,000 and shall be a licensed financial institution with a minimum net worth of N5,000,000,000 unimpaired by losses and has total assets of N125,000,000,000 or is wholly owned by a […]
In the case of funded pension schemes in the public service of the Federation and the private sector, employers shall undertake actuarial valuation of the employee’s accrued benefits and credit the Retirement Savings Accounts (RSAs) of its employees with such funds and in the event of any deficiency, the shortfall shall become a debt and […]
This new pension scheme is contributory, fully funded, privately managed, third party custody of the funds and assets and based on individual accounts. It ensures that everyone who has worked receives his/her retirement benefits as and when due.
The RSA is similar to a bank account except that no contributor can withdraw money from the RSA before his/her retirement. The PFA is required to invest the money and issue statements of account at least once every quarter to the contributor.
There is adequate representation of relevant stakeholders in the Board of the National Pension Commission, which comprises of representatives of the Government, Nigeria Labour Congress, the Nigerian Union of Pensioners and the Nigerian Employers Consultative Association.
An employee or contributor has the freedom to move his account, once a year, from one PFA to another without giving any reason(s).
Pension Boards in the private sector existing before the coming into force of the Pension Reform Act 2004 will continue to administer the pensions of the existing pensioners and the National Pension Commission will supervise such boards.
The new pension scheme covers all employees in the public service of the Federation, the Federal Capital Territory and the private sector of the economy.
Movement from one employment to another does not affect pension under the new scheme. The reform has removed the bottleneck associated with transfer of service from one organisation or sector to another, especially with regard to qualification for pension and the sharing formula for payment of pension as between employers.
Yes. The new pension scheme entrenches the principles of transparency and accountability as reflected in the reporting requirement of the PFAs and PFCs to both the contributor and the National Pension Commission. An employee has the right to choose who manages his RSA and the right to receive statements of his account on quarterly basis […]