An employer can make all the contributions on behalf of the employee without making any deduction from the employee’s salary except that such contribution by the employer shall not be less than 15% of the monthly emoluments of the employee.
The Federal Government has established the National Pension Commission and charged it with the responsibility of regulating and supervising new pension scheme.
Every employee may decide to join the contributory pension scheme or move his RSA from a closed PFA to a PFA of his choice subject to such rules and regulations as may be issued by the National Pension Commission.
If at the commencement of the Pension Reform Act 2004, the employee is entitled to gratuity (if he were to retire on that date), the gratuity shall be computed and included in the actuarial valuation as part of the accrued pension rights of such employee.
Your contributions are just savings out of your emoluments towards your old age and the employer’s contribution will only increase such savings.
The Government cannot tamper with the pension funds in your RSA, because the Government cannot have access to the account. Besides, the Government is primarily concerned with ensuring the safety of the money in your RSA through the enforcement of strict rules and regulations.
In accordance with the provisions of the Pension Reform Act 2004, only an employer with a pension scheme existing before the commencement of the Act can apply to be licensed as a closed PFA.
Withdrawals from the RSA can only be made upon retirement. However, where an employee makes additional or voluntary lump sum contributions into the RSA, he can withdraw such money before retirement or attainment of the age of 50 years.
Pension contributions are paid directly to the PFC to be held on the order of the PFA.
It is the duty of the PFAs to administer the contributions and invest in such a way that will ensure safe and reasonable returns on investment. The reserve fund created by the PFAs under the Act would compensate for any erosion of the value of the contributions.
A Pension Fund Custodian (PFC) is a company licensed by the National Pension Commission to keep pension money and assets in the RSA on trust for the employee on behalf of the PFA.
Employee’s right to accrued retirement benefits for the previous years he/she has been in employment is guaranteed by the Pension Reform Act 2004. In the case of the public service of the Federation and the Federal Capital Territory, where pension scheme was unfunded, the right would be acknowledged through the issuance of a ‘Federal Government […]
A fully funded pension scheme exists where pension funds and assets match pension liabilities at any given time.
Under the Pension Reform Act 2004 a person can voluntarily retire or be compulsorily retired before the age of 50 years on the ground of medical advice, permanent disability or due to particular terms and conditions of employment. If any person retires under any of the foregoing circumstances, he is entitled to withdraw from his […]