New pension act nigeria

The Pension Reform Act (PRA) 2014 is a law in Nigeria that aims to reform the pension system in the country. The Act was enacted to provide a more efficient and effective pension system, and to ensure that pensioners receive their benefits in a timely and transparent manner.

Some of the key provisions of the Pension Reform Act 2014 include:

  1. Establishment of the National Pension Commission (PenCom): The Act established PenCom as the regulatory body responsible for the administration of the pension system in Nigeria.
  2. Mandatory Pension Scheme: The Act made it mandatory for all employers in the public and private sectors to enroll their employees in a pension scheme.
  3. Defined Contribution Pension Scheme: The Act introduced a defined contribution pension scheme, where contributions are made by employees and employers, and the benefits are based on the contributions made.
  4. Retirement Savings Account (RSA): The Act introduced the concept of a Retirement Savings Account (RSA), which is a dedicated account for each employee to save for their retirement.
  5. Pension Fund Administrators (PFAs): The Act established Pension Fund Administrators (PFAs) as licensed entities responsible for managing the pension funds of employees.
  6. Pension Fund Custodians (PFCs): The Act established Pension Fund Custodians (PFCs) as licensed entities responsible for holding and managing the pension funds.
  7. Pension Transition Arrangement: The Act provided for a pension transition arrangement, which allowed employees who were already receiving pensions under the old pension scheme to continue receiving their pensions under the new scheme.
  8. Penalties for Non-Compliance: The Act provided for penalties for employers who fail to comply with the provisions of the Act, including fines and imprisonment.

The Pension Reform Act 2014 has been amended several times, with the most recent amendment being the Pension Reform Act 2021. The amendment introduced new provisions, including:

  1. Increase in the minimum pension age: The amendment increased the minimum pension age from 50 to 55 years.
  2. Increase in the maximum pension age: The amendment increased the maximum pension age from 65 to 70 years.
  3. Introduction of a new pension scheme: The amendment introduced a new pension scheme, known as the "Micro Pension Plan", which is designed for self-employed individuals and small business owners.
  4. Increase in the minimum pension benefits: The amendment increased the minimum pension benefits for employees who retire at the age of 55 or above.

Overall, the Pension Reform Act 2014 has been instrumental in transforming the pension system in Nigeria, and has helped to ensure that pensioners receive their benefits in a timely and transparent manner.