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What is the new Pension Scheme?This new pension scheme is contributory, fully funded, privately managed, third party custody of the funds and assets and based on individual accounts. It ensures that everyone who has worked recieves his/her retirement benefits as and when due.
Who is covered by the New Pension Scheme?
The new pension scheme covers:
- all employees in the public service of the Federation, the Federal Capital Territory and the private sector of the economy
Who is exempted from the new Pension Scheme?The existing pensioners, employees who have 3 years or less to retire and the categories of persons covered by the provisions of section 291 of the Constitution of Federal Republic of Nigeria 1999 are exempted from the new pension scheme.
Does an employee who has 3 years and 1 month to retire come under the old scheme or the new scheme?Any employee with more than 3 years to retire comes under the new pension scheme.
Is the new pension scheme mandatory for all categories of employers and employees covered under the act?The new pension scheme is mandatory for all categories of employers and employees covered under the Pension Reform Act.
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.
What is the main objective of the new pension scheme?One of the main objective of the new pension reform is to ensure that every person that worked in either the public or private sector in Nigeria receives his/her retirement benefits as and When due.
How is the new pension scheme different from the old pension scheme?Most of the old pension schemes were not fully funded. Therefore, upon retirement, there was no ready funds to pay the pensioners. The new pension scheme is fully funded. Money is contributed into individual employees Retirement Savings Account (RSA) and when he/she retires, there will be money in his/her RSA to pay his pension.
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