Critical questions pension contributors ask…

What is the minimum rate of pension contribution?

According to the Pension Reform Act (PRA) 2014, the minimum rate of pension contribution is 18 percent of monthly emoluments, where 8 percent is to be contributed by employees and 10 percent by employers. However, an employer may choose to bear the full responsibility of the scheme provided that in such a case, the employer’s contribution shall not be less than 18 percent of the employee’s monthly emoluments.

Who is exempted from the Contributory Pension Scheme?

The categories of persons exempted from the scheme are persons mentioned in Section 291 of the Constitution of the Federal Republic of Nigeria 1999 (as amended) i.e. Judicial officers; Members of the Armed Forces, Intelligence and Secret Services of the Federation.

Any employee who is entitled to retirement benefits under any pension scheme existing before 25 June 2004 (the commencement date of the scheme) or who as at the commencement date has 3 or less years to retire.

Can I use my Retirement Savings Account balance as collateral for a Mortgage scheme?

Following the enactment of the Pension Reform Act (PRA) 2014, Section 89 (2) of the Act provides that a Pension Fund Administrator (PFA) may subject to guidelines issued by the National Pension commission apply a percentage of the pension assets in a Retirement Savings Account (RSA) towards the payment of equity contribution for a residential mortgage by a RSA holder. We however await the issuance of guidelines for implementation from the Commission.

I work in the private sector and have been with my current employer for two years, and no remittance has been made on my behalf.

Making remittances on your behalf is the sole responsibility of your employer, and so when you commence any employment it is important that you provide your employer with your PIN number and the details of your Pension Fund Custodian (PFC).

I am a public sector worker, I recently discovered that no remittance has been made on my behalf despite regular deductions from my salary?

There are two categories to this – Treasury funded organisations and those on the Integrated Personnel and Payroll Information System (IPPIS).

The National Pension Commission (PenCom) is responsible for remitting the pension contributions for treasury funded ministries, departments & agencies (MDAs). PenCom determines the actual pension benefits due to individual employees based on the nominal rolls submitted by their employers. You are to liaise with your employer to include your correct details on the Nominal roll to be submitted directly to PenCom.

Contributions for ministries, departments & agencies (MDAs) under Integrated Personnel and Payroll Information System (IPPIS) are remitted by the Office of the Accountant General of the Federation. Kindly liaise with any federal pay office near you.

I haven’t received my RSA statement for quite a while. What is wrong?

PFAs normally should send you statement of account for each quarter via SMS and email or post.

If you have not received your statement through any of these means, please check that you have not changed your phone number, email address or correspondence address in recent times. If you have, you will also have to update your details with your PFA; you may do this by logging on to your account through or the website.

Where my employer fails to make monthly remittances for me what can I do?

According to the Pension Reform Act (PRA) 2014, employers are legally bound to make contributions on behalf of their employees within seven working days after the payment of salaries. The PRA 2014 also empowers PenCom, subject to the fiat of the Attorney General of the Federation, to institute criminal proceedings against employers who persistently fail to deduct and/or remit pension contributions of their employees within the stipulated time. Cases of unremitted pension contributions should therefore be brought to the notice of PenCom directly or through your Pension Fund Administrator (PFA).

Where it appears that my monthly remittances are less than the amount being deducted from my monthly salary, what do I do?

For public sector workers, it is important to note that the National Pension Commission (PenCom) has discontinued the use of documentary evidence for remittance purposes. Public sector employees are to liaise with their employers to include their correct details on the Nominal Roll to be submitted directly to PenCom.

The Nominal Roll is used by PenCom to retrieve employees’ details from various Ministries, Departments and Agencies (MDAs) to enable them determine the actual pension benefits due to individual employees based on their current grade levels and steps.

How do I monitor my contributions?

When an employee opens a Retirement Savings Account (“RSA”) with a Pension Fund Administrator (PFA), that PFA is required to issue periodic statements of account showing how much has been contributed as well as returns on investment generated from the contributions.

PFAs send out periodic soft and hard copy statements to contributors email and correspondence address as well as Transaction Notification Services (‘TNS’) whenever there is a transaction on your RSA. Kindly liaise with your employer to include your details on the Nominal Roll to be submitted to PenCom.