Public or private sector employees, retired or disengaged persons currently receiving pension under the Contributory Pension Scheme (CPS), or any worker/retiree in an organisation that operates a closed pension fund administration and who were employed prior to June, 2014 are now eligible to make voluntary contributions, the new guidelines on voluntary contribution released by the National Pension Commission (PenCom) has shown.
Other categories of people eligible under the guidelines include any foreigner residing and working in the formal sector in Nigeria; any person who retired, disengaged or whose employment was terminated and is currently receiving pension under the CPS, but secures another employment on contract basis; members of the armed forces, the intelligence and the secret services of the federation; any person who is appointed by the President of the Federal Republic of Nigeria, state government and elected officers to hold office for a stipulated tenor and who is not a career civil servant, as well as any retiree under the defunct defined benefit scheme, who secures another contract employment.
The new voluntary contribution, expected to increase total pension assets put at N8.35 trillion as at August, however excludes the informal sector, which still has to wait for the much expected micro pension scheme to be introduced to enable them begin to save towards their retirement.
According to the new guidelines obtained by business a.m. on the PenCom website, the voluntary pension contributions (VPC) is simply to allow Retirement Savings Account (RSA) holders to make additional contributions beyond the statutory employee and employer monthly contributions.
Peter Aghahowa, head, corporate communications at the commission in an explanatory statement said the release of the guideline was in furtherance to carrying out its mandate of regulating the pension industry.
The commission said part of the objective of the new guidelines is to establish a uniform set of rules for the operation of voluntary contributions and eligibility criteria for participation in the contributions.
It is pertinent to note that the Pension Reform Act (PRA) 2014 allows employees to make voluntary contributions into their RSA in addition to their mandatory pension contributions, with the sole aim of enhancing their retirement benefits.
“According to the issued guidelines, voluntary contributions shall be non-obligatory contributions made by any employee in the formal sector through the employer.
“The objectives of the released guidelines are to establish uniform set of rules for the operation of voluntary contributions and eligibility criteria for participation in the contributions and to provide the procedure for making voluntary contributions as well as necessary safeguards and modalities for its withdrawals.
“The guideline will enable contributors to utilise voluntary contributions for the purpose of enhancing future retirement benefits for active or mandatory contributors, will encourage retirees under CPS to utilise part or all of the Voluntary Contributions to augment their existing pension, will assist retirees under defunct Defined Benefit Scheme (DBS), exempted persons from the CPS and foreigners to save in order to cater for their livelihood during old age,” Aghahowa said.
The commission, however, urged contributors to be adhere to the guidelines and encouraged them to direct all their enquiries concerning voluntary contributions to their respective Pension Fund Administrators (PFAs).
Meanwhile, the commission in a bid to further enlighten the public on the operation of the CPS, has begun a radio programme titled: “Retirement Mata”.
The programme, which made its debute on October 26, 2018, is a weekly 30-minute pidgin programme, which will be on air every Friday on NAIJA 102.7FM, Lagos, at 5:00pm.
The Commission called on workers and retirees under the CPS to listen to the programme, noting that it will be interesting and educative.
- Pension Gross assets value dips N6.9bn in one month despite rise in RSA
- Gross assets value dips N6.9bn in one month despite rise in RSA
- NAICOM sensitizes MDAs on adequate insurance coverage for government…
- Coffee, sugar prices rise as tightened supply persists
- Nigeria’s rising debt stock alarming at N32.92trn