Tinubu and the Pension Relief Bill

A pension is a retirement fund for an employee paid into an employee’s Retirement Savings Account (RSA) by the employer (who pays 10%) and the employee (who pays 8% of his/her gross salary). When such an employee has reached a certain age or based on a health condition cannot cater for his/her needs in old age, an annuity is paid to the employee which is calculated by the terms of the pension.

 The pension industry in Nigeria currently operates using the Contributory Pension Scheme (CPS). This scheme requires pension funds to be privately managed exclusively by licensed Pension Fund Administrators (PFA) while the Pension Fund Custodians (PFCs) are responsible for keeping the custody of pension assets on trust on behalf of contributors. The Pension Relief Act is a proposed bill designed to promote advanced collection of pension fund by workers who have participated in contributory pension scheme for a period of 10 years and desire to collect its contributory pension fund for project, business or any other purposes. The act will serve as a bailout for aged workers, sick workers, impaired workers and displaced workers both in private and public sector who may need such fund for progression. The bill is designed to strengthen the existing Pension Reform Act 2004 that make provision for workers to gain access to their contributory pension scheme after 35 years of service or at retirement age of 60.

The Pension Relief Act is an arrangement which allows an employee who have participated in pension contributory scheme for a minimum of 10 years period gain access to 70% of its contributory pension fund. The passage of this bill by the Tinubu administration and the 10^th National Assembly led by Senate President Godwin Akpabio will foster national unity and workers support for the new administration.

Pedro Ukokobili, Abuja