AN OVERVIEW OF THE PENSION SCHEME IN NIGERIA.
The Pension Scheme in Nigeria is a crucial social safety net that provides financial security and stability to millions of workers at retirement.[2] Established under the Pension Reform Act of 2004, the scheme aims to safeguard the welfare of employees by ensuring that they have adequate financial resources to sustain themselves after leaving the workforce.
The root of the Pension Scheme in Nigeria can be traced back to the early 1950s when the first pension arrangements were introduced for civil servants.[3] Over the years, the system evolved, culminating in the comprehensive Pension Reform Act of 2004, which established the present-day structure of the scheme.
Who is entitled to a pension scheme in Nigeria?
Under the Pension Reform Act of 2014, both public and private sector employees are eligible for a pension scheme. Section 2 of the act (PRA 2014) specifically outlined those eligible for the pension scheme in Nigeria. They are:
SECTION 2:0 ELIGIBILITY CRITERIA
2.1 Any employee in an organization with three or more employees, who is making mandatory contributions under the CPS.
2.2 Any worker/retiree in an organization that operates a Closed Pension Fund Administration and was employed before June 2014 as well as employees/retirees in an organization with an Approved Existing Scheme (AES).
2.3 Any person who retired, disengaged or whose employment was terminated and is currently receiving a pension under the CPS, but secures another employment on a contract basis.
2.4 Any retiree under the defunct Defined Benefit Scheme, who secures another contract employment.
2.5 The categories of persons mentioned in Section 291 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended); members of the Armed Forces and the Intelligence and the Secret Services of the Federation.
2.6 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.
2.7 Any foreigner residing and working in a formal sector in Nigeria.”[4]