Do not rejoice over ‘Bonus’ if you have no pensions

Organisations during this time of the year reward staff for hard work and sometimes distribute a percentage of their profit to enable employees have more money in their hands. This is usually called end of the year bonus or thirteenth month.

So, employees look out for it particularly in thriving organisations as part of the end of year income depending on the terms of such employment contract. But this brings excitement and increases commitment of employees to their job, and love for their employers. When this happens, employees most times tend to forget their worries, ride on the frenzy of the season and only to realise that the joy was for the short time as soon as work resumes in the New Year.

Yes. Bonus is good but Pension is better. If your employer has not opened for you a Retirement Savings Account (RSA) with your chosen Pension Fund Administrator (PFA) and/or is deducting from your salaries and is not remitting to the Pension Fund Custodian (PFC) after deductions, and is rewarding you with Christmas bonus, know that you are just being deceived.

Do not be excited for what will not take you beyond the New Year in the name of bonus, but be excited that your employer has resolved to contribute to your pension pursebeginning from the New Year, or have started remitting your pension deductions.This is what should bring more excitement because that is what guarantees your future and happy life when you leave employment or retire from active job.

Pension is your right, so compel your employer to get you off the track by starting a pension contribution with any of the PFA’s.

Start to plan for your future now with your employer, but if you fail to contribute to your pension plan, you will not be happy when your retirement comes. This is the truth and those who failed to plan have always regretted. So, retirement is a very important period in once life that must be prepared for. It’s a period during which a person is no longer able to work, meaning that income from paid employment ceases to come. So, the person would have to depend on his or herpension plan made during active work life to continue the rest of his life.

Given the importance of retirement, it becomes important that steps are taken with every sense of commitment towards ensuring that nothing affects the preparations because that very important period is waiting ahead.

Therefore, if there is anything that should beof great concern to you as an employee, not bonus for Christmas or Thirteenth month, it should be your pension plan because that determines how well you will live in your retirement.

The Pension Reform Act 2014 has placed the future of workers in their hands by empowering them to report employers who fail to comply with the laws.The employees must come together and pressure the employer to pay their pensions. When your self-help fails, then you can approach the National Pension Commission (PenCom), the regulator for all pension matters in Nigeria. They have offices in the six geopolitical zones of the country and have the powers to enforce compliance. They are open for complaints, so people could go and report employees who fail to comply with the law.

Given the importance, it is most advisable that you take active part in knowing how your pension is managed, right from your employers table to the mangers of the fund. If you already have an RSA PIN, let your employer have it through the human Resource Department or Accounts Department for remittance of your contributions.

This is the beauty of the Contributory Pension Scheme (CPS) as provided in the Pension Reform Act 2004 and amended in 2014.

Being therefore a part responsibility of the employee to make contributions to the pension purse, he or she must always and keenly monitor developments in his retirement savings account being managed by his Pension Fund Administrator (PFA).

The whole essence of the pension scheme being to ensure that every person who worked in either the public service of the Federation, Federal Capital Territory or Private Sector receives his retirement benefits as and when due, gives the employee contributor rest of mind to continue his working career.

The Contributory Pension Scheme, as the name suggests, is contributory in nature, making it mandatory on employers and employees in both the public sector and private sector organisations with three or more workers to contribute 10 and 8 percent respectively of the emoluments of the employee into a Retirement Savings Account (RSA).

Apart from ensuring that every worker receives his entitlement as and when due, the other objectives of the scheme includes to assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age.