Everything You Need to Open a Pension Account in Nigeria
You are entitled to a pension account as long as you are an employee living and working in Nigeria. This is because you deserve to fall back on a stable means of income in retirement.
Your readiness to open an account with a Pension Fund Administrator (PFA) of your choice is why you’re here.
And we will put you through everything you need to open a pension account — from documents to how to open a pension account in Nigeria and the requirements that qualify you to open one.
Let’s get right into them.
However, you should also bear in mind that there are two major pension schemes in Nigeria and we’ll explain them below.
Two Major Types of Pension Schemes in Nigeria
Contributory Pension Scheme (CPS)
This pension scheme is the most common type of pension scheme in Nigeria. It is compulsory for all employees in the public and private sectors.
It was introduced in 2004 when the Federal Government of Nigeria enacted the Pensions Reform Act (PRA 2004) and made it compulsory for both employers and employees in the public and private sectors to contribute to the retirement benefits of employees.
The main goal of the Contributory Pension Scheme (CPS) is to ensure that all employees in either the public or private sector, including self-employed individuals, receive their retirement benefits as and when due.
Under the Contributory Pension Scheme, we have:
Voluntary Contributions also known as Additional Voluntary Contributions (AVCs)
READ MORE: What a Micro-pension plan can do for you
Defined Benefits Scheme (DBS)
The Defined Benefits Scheme (DBS) is administered by the Pension Transitional Arrangement Directorate (PTAD), a Federal Government Agency.
Under the Defined Benefits Scheme, the employer is mandated to remit the total pension contributions. The DBS covers only the pensioners existing prior to the enactment of the Pension Reform Act 2004 and employees exempted from the Contributory Pension Scheme (CPS).
The pension account you decide to open in 2023 will be under the Contributory Pension Scheme (CPS). It is known as a Retirement Savings Account (RSA).
What do you need to open an RSA in Nigeria in 2023?
First of all, you have to verify that you are eligible to open an RSA. This means that you:
Work in a private or public organization with three or more employees
Are self-employed in which you will have to open a micro pension account
Work in a private or public organization with less than three employees
To open an RSA, you’ll need the following documents:
Your letter of employment
Valid means of identification (Staff ID Card, National Driver’s License, Permanent Voter’s Card, National Identity Card or data page of international passport)
Enrolment slip issued by the National Identity Management Commission (NIMC) indicating your National Identification Number (NIN)
After gathering these documents, visit the nearest Pension Fund Administrator (PFA) of your choice to fill out an RSA opening form.
YOU CAN READ: 5 Reasons You Should Choose Oak Pensions as Your PFA
To open an RSA with Oak Pensions, visit the nearest branch office with your documents to pick up your RSA form. Alternatively, you can send an email to firstname.lastname@example.org after downloading the form online here or call 234 700 225 5625.