Q: What is the new Pension Scheme in Nigeria?

A: The new scheme is a contributory, privately managed pension scheme. Every eligible Employee shall maintain a Retirement Savings Account in his name with the Pension Fund Administrator (PFA) of his choice. The employee shall notify his employer of the PFA chosen and the identity of the Retirement Savings Account (RSA) opened. The employee and employer contribute a minimum statutory percentage of the employee’s monthly emoluments (comprising basic salary, housing allowance and transport allowance) into the Retirement Savings Account of the employee. The contributions would be managed and administered by Professional Fund Administrators and held in custody by licensed Pension Fund Custodians. At retirement, the amount in the employee’s Retirement Savings Account would be the total contributions plus income and capital gain earned on the contributions made.