FAQs – Frequently Asked Questions

 

What Is This New Pension Scheme?
  • This new pension scheme is contributory
  • Fully funded
  • Privately managed
  • With third party custody of the funds and assets and
  • Based on individual accounts.
  • It ensures that everyone who has worked receives his/her retirement benefits as and when due.
Who Is Entitled To Enrol Under The Scheme?

The new scheme covers you if you work for government or in a private organisation that has three or more employees.

How Do I Open An Account?

To download an Account Opening form, click here

Complete the application form to open a Retirement Savings Account. Submit the form and a white background passport size photograph to our nearest branch office. A personal identification number (RSA PIN) will be issued to you as evidence of successful registration.

Is The Private Sector Pension Being Merged With The Public Sector?

There is no merger of private sector pension with that of the public sector pension since the sources of funding are not the same.

However, both are now being regulated under the same rules and regulations.

How Much Will An Employee Contribute Into The New Scheme?

An employee shall make monthly contributions of a minimum of 8% of his/her total monthly emoluments (i.e., monthly basic salary, transport allowance and housing allowance) into his RSA.

The employer shall contribute a minimum of 10% of the employee’s monthly emoluments towards the retirement benefits of the employee.

How Does The Pension Scheme Work?

Contributions towards your pension are taken out of your salary by your employer every month. In addition to this, the employer makes a contribution towards the pension. The two contributions are jointly paid to the Pension Fund Custodian who puts the funds into an account which is held in your name with your Pension Fund Administrator (PFA).

The contributions made for you are kept in a Retirement Savings Account which is managed by your PFA. The PFA must issue a Statement of Account to you at least once every quarter or on demand. You will also receive transactional and quarterly balance SMS alerts so that you can watch and monitor your pension as it grows.

Is The RSA Operated Like A Bank Account?

The RSA is similar to a bank account except that no contributor can withdraw money from the RSA before his/her retirement. The PFA is required to invest the money and issue statements of account at least once every quarter to the contributor or on demand.

How Does Movement From One Employment To Another Affect Pension?

Movement from one employment to another does not affect pension under the new scheme. The account (RSA PIN) remains yours for life. You just need to notify your PFA of the change, forward your RSA PIN and PFA details to your new employer to ensure that the pension contributions/deductions from the new employer will be sent to that account.

What Is The Minimum Period Required By An Employee To Qualify For Pension Under The New Scheme?

There is no qualifying period for pension. If an employee works for an employer for one month, his/her pension contribution will be paid by the employer into the employee’s Retirement Savings Account (RSA) for that month. If the employee moves on to work for another employer for another 1 year, the pension contribution will be paid by the second employer for that period of 1 year and it goes on and on like that.

When Will I Have Access To Money In My RSA?

You can have access to the RSA upon retirement at the age of 50 years or more. Similarly, if an employee retires before the age of 50 years due to mental or physical incapacity, he/she can access RSA immediately. Also, an employee who resigns or loses employment under the age of 50 years is entitled to withdraw 25% from the balance of his/her RSA if he/she stays for 4 months without securing another paid employment.

The balance of 75% of the RSA will be invested to generate additional income and the RSA holder will continue to receive statement showing the income being generated. Upon attaining the age of 50 years and if the balance in the RSA is above N500,000, the RSA holder will be placed on a monthly pension plan. But if the balance is N500,000 or less, the amount will be paid to the RSA holder en-bloc. In the event of death, the entire amount in the RSA will be paid to the holder’s nominated beneficiary.

Will Gratuity Be Paid Under The New Scheme?

No, there is no gratuity under this scheme. However the law provides for payment of Lump Sum benefit (minimum of 25% and maximum of 50%) to a retiree at retirement from the balance standing to the credit of his/her RSA. This benefit payment is made provided the balance after the withdrawal could purchase an annuity or fund monthly payments that would not be less than 50% of his/her monthly pay as at retirement.

However, an employer may choose to pay any other severance benefits (by whatever name called) over and above the retirement benefits payable to the employee subject to the terms and conditions of his/her employment.

What Are The Types Of Benefits Under The New Scheme?

Under Normal Retirement (50 years above) the customer is entitled to minimum of 25% and maximum of 50% of RSA balance as Lump sum payment and a monthly or quarterly programmed withdrawal.

Retiree above 50 years with 500,000 naira or below as RSA balance is paid off (enbloc payment).

Temporary loss of job and voluntary retirement before the age of 50 years is paid 25% of RSA balance 4 months after exit.

Death benefits is full payment of RSA balance to nominated Next of Kin, this also applies to group life insurance payment.

What Happens When An Employee Who Has Been Contributing Under The New Scheme Dies Before Retirement?

Where an employee/retiree who has been contributing under the new pension scheme dies, his/her retirement benefits shall be paid to his/her beneficiary under a WILL. In the event that the deceased did not leave a WILL, the retirement benefits shall be paid to any person appointed by the Probate Registry as the administrator of the estate of the deceased.

How Will The Money Contributed Be Managed?

The total contributions will be paid out by the employer directly to a Pension Fund Custodian and will be managed and invested by the Pension Fund Administrator (PFA) of the employee’s choice.

How Do I Get Higher Pay At Retirement?

You can increase your pension by making additional voluntary contribution over and above the 8% prescribed by PRA, 2014. Similarly, your employer may increase the employer’s pension contribution above the 10% minimum contribution prescribed by law.

Can A PFA Or Employer Have Access To The Money In My RSA?

The PFA or your employer cannot have access to the funds in your Retirement Savings Account (RSA). The account operates on your exclusive instruction.

How Is The New Scheme To Be Regulated?

The National Pension Commission is empowered by the Pension Reform Act 2014 to supervise and regulate the new pension scheme

WHAT ARE THE MAIN FUNCTIONS OF THE NATIONAL PENSION COMMISSION?
The National Pension Commission issues licenses to PFAs and Custodians, regulates their activities, and generally formulates, directs and oversees the overall policy guidelines on pension matters in Nigeria.

What Happens If A PFA Fails Or Is Liquidated?

The pension funds and assets in the Retirement Savings Account (RSA) are kept by the PFC and as such the liquidation of the PFA will not affect the funds and assets. Besides, under the Pension Reform Act 2014, every PFA is expected to maintain a statutory reserve fund as contingency fund to meet claims for which it may be liable as may be determined by National Pension Commission.

HOW CAN I BE SURE THAT MY CONTRIBUTIONS ARE SAFE?
All those managing or keeping custody of pension funds and assets will be licensed and continually regulated and supervised by the National Pension Commission.

WILL INFLATION AND DEVALUATION OF THE NAIRA NOT ERODE THE VALUE OF THE PENSION CONTRIBUTIONS?
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.

What Can I Do If I Have A Complaint About My Pension?

You can call our Call Centre on 09-4615700 or send us an e-mail csu@premiumpension.com. Our Call Centre can also be reached on 09029684547, 09029684548.

We are on Facebook, Twitter, Instagram, LinkedIn via Premium Pension. You may also visit any of our branch offices or service centres located in First Bank major branches throughout the country. We are available for live chat, click here.



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RSA Fund Unit Price
3.1914

Retiree Fund Unit Price
2.3993

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