The Pension Reform Act 2014 (PRA) set rules and standards for the payments of retirement benefits to ensure that every person who worked in either the Public Service of the Federation, Federal Capital Territory, States

The PRA established a contributory scheme to ensure employees derive the benefit of effectively being paid their pension as and when due upon retirement. This fund is regulated by the National Pension Commission (PenCom). The job of the PenCom is to enforce and administer the pension regulations as laid out by the PRA 2014. It regulates two types of companies – Pension Fund Administrators (PFAs) and Pension Fund Custodian (PFCs).
An employee or beneficiary of a Retirement Savings Account who is dissatisfied with a decision of the Pension Fund Administrator or employer in respect of pension matters may request, in writing, that such decisions be reviewed by the Commission.
Contact Information of PenCOm
Office Address: 174, Adetokunbo Ademola Crescent, Wuse 2, Abuja, Nigeria Email: info@pencom.gov.ng Twitter: @pencomnig P: 0700-CALLPENCOM (0700-225 -573-6266) +234 9460 3930
20 things every employee should know about the Pension Scheme
- The PRA establishes a Contributory Pension Scheme for public and private sector employees
- Contributory pension applies to private companies with over 15 workers.
- The Employer and the employee contribute a percentage of the employees’ salary to the scheme every month.
- The minimum contribution for the employer is 10% and 8% for the employee which is kept in a Retirement Savings Account(RSA)
- Employees are expected to choose a Pension Fund Administrator (PFA) and provide details to their employer
- Deducted pension contributions are paid to the PFC specified by the PFA. The PFC informs the PFA of the fund. The PFA then credits the RSA of the employee.
- Employers are mandated to remit contribution to the PFC specified by the Employee’s PFA not later than 7 working days from the day the employee is paid his salary.
- An employee can maintain the same PFA after changing job, however, he can switch to another PFA only once in a year.
- Funds contributed are invested by the PFA in approved investments (Bond, securities etc,)
- Employees can not make a withdrawal from their RSA until they retire or attain 50 years (those less than 50 years can not access their RSA unless under certain conditions)
- A retiree can withdraw a lump sum from the total fund in the RSA if the amount left can procure an annuity that provides regular income or fund a programmed fund withdrawal
- The programmed monthly or quarterly withdrawals is calculated on the basis of an expected lifespan.
- Persons who have not attained 50 years can withdrawal from their RSA if they have proven mental or physical incapacity.
- A Person disengaged before the age of 50 and is unable to secure another employment within four months may withdrawal 25% of the total amount credited to his/her RSA. The remaining balance will be accessed after he/she attains 50 years.
- An employee shall not have access to his RSA or have any dealings with the Pension Fund Custodian with respect to the RSA except through the Pension Fund Administrator.
- When an employee dies before retirement, the PFA will release the remaining amount in the RSA after receiving a valid will or a letter of administration confirming the beneficiaries under the estate of the deceased employee.
- Where an employee is missing after a period of one year. Pencom will then set up a board of inquiry after the investigation the employee is presumed dead. The beneficiary of the will or letter of administration will be paid the balance of the RSA
- Retirement benefits are not taxable this includes interests, dividends, profits, investment and other income accruable to pension funds and assets
- Employers who do not remit or delay remittance attracts a penalty. The Penalty is the payment of the unpaid remittance, plus not less than 2% of the amount due
- Employees can pay Additional Voluntary Contributions to their RSA which they can withdraw at any point before retirement, it is not tax-free unless withdrawn after 5 years

Reference
National Pension Commission, Pension Reform Act 2014, viewed 12 November 2018, <https://www.pencom.gov.ng/pension-reform-act-2014/>