Article pdf available august 2014 with 4,711 reads. Text created by the government department responsible for the subject matter of the act to explain what the act sets out to achieve and to make the act accessible to readers who are not legally qualified. Vc that is withdrawn after 5 years from the date the contribution was made will still be tax free. As part of our continued efforts to share information on the contributory pension scheme cps, we present key highlights of the pension reform act 2014 recently signed into law by the president. The move by the senate to amend the pension reform act 2014 to allow retirees have access to 75 per cent of their retirement saving is illadvised. Pension reform act, 2014 part iestablishment of a contributory pension scheme there is established for any employment in the federal republic of nigeria, a contributory pension scheme in his act referred to as the scheme for payment of retirement benefits of employees to whom the scheme applies under this act. The pension reform act, 2014 repealed the 2004 pension reform act, no. There are currently no known outstanding effects for the pensions act 2014, schedule 2. Nigeria unveils economicreform plan as it aims to secure.
The pension reforms act, 2004 which introduced the defined contribution pension scheme with its regulatory and agency bodies such as the national pension commission pencom, pension fund. Jul 12, 2017 before the 2004 federal pension reform act, most state governments and companies in nigeria operated under the defined benefits pension scheme, popularly referred to as the pay as you go scheme. The pension reform act 2004 established the national pension commission pencom as the body to regulate, supervise and ensure the effective administration of pension matters in nigeria. The principal enactment is amended by the substitution for section 60 of 60 1 a worker who isentitled to retirement benefits under a pension scheme in existence before the commencement of this act and is aged fiftyyears or above is exempt from the scheme. Part i establishment and objectives or contributory pension scheme for employees inti ie public and private sectors 1. Pension reform act, 2014 nigeria published on july 10, 2014 july 10, 2014 19 likes 5 comments. Pension reform act, 2014 an act to repeal the pension reform act no. The pension reform act 2014 the act was enacted by the national assembly of the federal republic of nigeria on july 1, 2014 to repeal the pension reform act no. Group life insurance cover compulsory for employers new.
All you need to know in brief on 1 july 2014, president goodluck jonathan signed into law the new pension reform act 2014 which repealed the pension reform act no. Consequently, the pension reform act, 2004 cannot be the subject of an amendment. In compliance to the pension reform act pra 2014, the national pension commission pencom, has given employers of labour up till march 31st, to comply with the guidelines for life insurance. The pension reforms act, 2004 which introduced the defined contribution pension scheme with its.
The contemporary global debate about pension reforms is based mainly on the concern for. This is a free educational material which does not create a clientattorney relationship. Pension reform act 2014 the good, the bad and the ugly. The emergence of the pension reform act 2014 matrix solicitors. Highlights of the pension reform act pra 2014 standard bank. Why i want ghanas ssnit abolished in favour of nigerias.
The pension reform act 2004 encapsulated the policies of the federal government of nigeria to solve the pension challenges in the country. Prior to 2004, the administration of pension in nigeria was largely marked by the noncontributory defined benefit scheme. Characteristics of defined contributory pension scheme in nigeria and chile. An act to establish a contributory pension scheme for employees in the. The new pension scheme which was established in 2004 under the nigeria pension reform act no.
Explanatory notes were introduced in 1999 and accompany all public acts except appropriation, consolidated fund, finance and consolidation acts. Nigeria has just published a muchanticipated and muchdelayed plan for economic reforms needed to steer the country out of the worst economic crisis it has faced in 25 years. The act encourages participation in the contributory pension scheme which applies to two categories of. The new act serve as the enabling legislation for the administration of the contributory pension scheme. Constitution as amended and the freedom of information act. The pension reform act 2014 what you need to know by olufola wusu. Unexpected change will occur in the relationship between people and those administering this welfare security scheme, in terms of the gains provided and financing, which will be a result of. Although the workmens compensation act wca sought to compensate employees for loss suffered.
After 10 years of the pension reforms in nigeria being passed, the pension reform act 2014 was signed into law to address. Nigerias pension reform of 2004 was necessitated by the myriad of problems that plagued the payasyougo schemes in the public sector and the varying types of pension schemes that existed within the private sector, which resulted in retirees not getting their. Following years of economic stagnation, nigeria embarked on a comprehensive reform program during the second term of the obasanjo administration. Pension scheme operated in nigeria, the federal government took a groundbreaking step in 2004 to. On 1 july 2014, president goodluck jonathan signed into law the new pension reform act 2014 which repealed the pension reform act no. A comparative analysis of the implementation of the defined. The pension reform act 2014 newsletter july 2014 1. Pensions and pension reform in nigeria springerlink.
This is a free educational material, which does not serve as a source of. Like the repealed act, the new pension reform act governs and regulates the administration of the contributory pension scheme for both the public and private sectors in nigeria. Gratuity benefits under the pension reform act, 2014 legal alert november 2016. O lecturer, department of accounting, university of benin, nigeria.
The new act would serve as the enabling legislation for the administration of. Funds contributed to pfas shall be computed and credited into the respective retirement savings account opened under the act. Implications of the pension reform act vanguard news. Gratuity benefits under the pension reform act, 2014 legal. Since, it is demonstrated that nations can gain from a free trade, it is impetrative to examine the implications of such opening up for growth, and hence, poverty and inequality. Earnings within the accounts are taxfree, but withdrawals in the form of. Any company that is set up by the nigeria social insurance trust fund nsitf under the pension reform act no. Hence, the consequent amendment of the pension reform act of 2004 pra 2004. The pension reform act 2014 has made defaulting employers liable for claims arising from the death of their employees should they fail. Pension reform act 2004 national pension commission. An act to set up a law reform commission for nigeria to undertake the progressive development and reform of substantive and procedural law applicable in nigeria by way of codification, elimination of anomalous or obsolete laws and general simplification of the law in accordance with general directions issued by. Kay olukayode adewusi, fcca follow senior analyst at national australia bank. Fears over amendment of pension reform act nigeria business.
Full details of the pra 2014 can be downloaded from. To achieve this objective the paper divided into four parts. Act, 2014 to make provision for the uniform contributory pension scheme for public and private sectors in nigeria. Sep 25, 2017 presently, there are some bills before the national assembly, aiming to amend some sections of the pension reform act 2014. In compliance to the pension reform act pra 2014, the national pension commission pencom, has given employers of labour up till march 31st, to. This newsletter summarises some of the key provisions contained in the version of the act signed by the president. Pdf pension reform act 2014 and the future of pension. Pension reform act news latest breaking stories and top. Welfare systems have been undergoing reform in most developing countries, and this is a major component of the international monetary fundworld bank structural reform programme for developing economies. Were a network of firms in 157 countries with more than 184,000 people. Are you wondering what additional cost you may have to incur to comply with the 2014 pension reform act. Voluntary pension contribution arresting the tax leakage.
A contributory pension scheme was established for every employee under the pension reform act 2004. May 30, 2017 the move by the senate to amend the pension reform act 2014 to allow retirees have access to 75 per cent of their retirement saving is illadvised. You have chosen to open the whole act as a pdf the whole act you have selected contains over 200 provisions and. Gratuity benefits under the pension reform act, 2014. Key facts about the pension reform act 2014 vanguard news. An appraisal of the concept of trust in the nigerian. The pension act 2014 on 1 july 2014, president goodluckebele jonathan signed into law the act, which repeals the pension reform act 2004. Unexpected change will occur in the relationship between people and those administering this welfare security scheme, in terms of the gains provided and financing, which will be. About pwc pwc helps organisations and individuals create the value theyre looking for. Pension reform act 2014 key highlights and salient points. Pension reform act of 2014 jobs in nigeria ngcareers. Pension reform act 2014 the good, the bad and the ugly pwc. In this piece, sola alabadan highlights the salient issues in the new pension reform act 2014 which repealed the pension reform act 2004.
The act encourages participation in the contributory pension scheme which applies to two. Read all the latest news, breaking stories, top headlines, opinion, pictures and videos about pension reform act from nigeria and the world on today. A critique of pension reform act, 2004 in nigeria anyim. Regulation and supervision of the scheme established under the act. The pension reform act governs and regulates the administration of the contributory pension scheme for both the public and private sectors in nigeria. The rationale behind the new scheme is to make both employers of labour. Pension reform act 2004 25th june, 2004 enacted by the national assembly of the federal republic of nigeria commencement. Enacted by the national assembly of the federal republic of nigeria. Jul 10, 2014 the new pension act 2014 is an eye opener of the obvious benefits in the contributory scheme. However, previous attempts by successive governments in nigeria at instituting a hitch free workable pension scheme have been hampered by inadequate and untimely funding, improper records, endemic fraud and corruption leading to avoidable pains and misery for the retirees and beneficiaries.
One of the bills which seek to exclude members of the nigeria police force, the nigeria security and civil defence corp, nigeria custom service, nigerian prison service, nigeria immigration service and the economic and financial crimes commission from the contributory. Pdf on sep 1, 2014, okechukwu innocent eme and others published pension reform act 2014 and the future of. Nigerias pension reform of 2004 was necessitated by the myriad of problems that plagued the payasyougo schemes in the public sector and the varying types of pension schemes that existed within the private sector, which resulted in retirees not getting their benefits. The first part of the paper considers a brief history of the pension system in nigeria. Mar 23, 2007 following years of economic stagnation, nigeria embarked on a comprehensive reform program during the second term of the obasanjo administration. Prior to the enactment of the pra 2004, nigeria had operated a system known as the. This paper seeks to examine the future of pension administration in nigeria. The utility is that it gives pencom the opportunity to resolve such matters before they escalate into a full blown litigation. On 01 july 2014, the president signed the pension reform act pra 2014 into law download pdf here 29. Establishment of a contributory pension scheme for employee in the public and private sectors. Due to the average life expectancy in nigeria being less than 55 years, commentators have. According to the federal government of nigeria, the value of pension assets in nigeria is about 4.
Aug 14, 2016 prior to 2004, the administration of pension in nigeria was largely marked by the noncontributory defined benefit scheme. The pension reform act 2014 pra or the act and the repealed pension reform act 2004 played a great role in ensuring employers and the employees in nigeria save for employees retirement. After 10 years of implementing the pension reforms in nigeria, the pension reform act 2014 was signed into law to address the challenges faced in the implementation processes. Eme et al 2014 opined that the amended pension reform act 2014 gave more powers to pencom as it. One of the bills which seek to exclude members of the nigeria police force, the nigeria security and civil defence corp, nigeria custom service, nigerian prison service, nigeria immigration service and the economic and financial crimes commission from the.
The scheme seems very novel both in organization and administration to many employees and employers in nigeria. An act to make provision about pensions and about benefits payable to people in connection with bereavement. Dangers of amending pension act 2014 the guardian nigeria. Due to the average life expectancy in nigeria being less than 55 years, commentators have seriously questioned the propriety of the retirement age of 60 years, as provided for in the pension reform act, 2014. Employees in nigeria have further improved their savings culture by contributing above the statutory minimum of 8% of their gross monthly emoluments to. Jul 10, 2014 pension reform act, 2014 nigeria published on july 10, 2014 july 10, 2014 19 likes 5 comments. The pension reform act 2014 has some major amendments which all. Comments on the company voluntary arrangements in the proposed nigerian insolvency act 2014 bolanle adebola introduction 1 nigeria is on the threshold of its first dedicated insolvency act. The objective of this study is to highlight the differences between 2004 and 2014 pension reform act in nigeria.
Presently, there are some bills before the national assembly, aiming to amend some sections of the pension reform act 2014. The key objectives of the reform are to ensure contributors receive their benefits as and when due and to assist improvident individuals to save in order to cater for their livelihood during old age. Contributory pensions scheme vs pension reform act 2014. The outcome of the reform was the enactment into law of the pension reform act 2004. I there shall be established for any employment in the federal republic. National pensions amendment act, 2014 act 883 section 60 of act 766 amended 2. Group life insurance cover compulsory for employers new pension act. Thereafter, the problems and characteristic features associated with the old pension scheme is examined. The pra 2014, which repeals the pension reform act no 2 of 2004, governs and regulates the administration of the contributory pension scheme the scheme in nigeria. Pension reform act 2014 and the future of pension administration in nigeria. Pension reform act 2014 national pension commission. An appraisal of the concept of trust in the nigerian pension.
Nov 17, 2016 this is especially as there is no mention of mandatory gratuity obligations post the enactment of the repealed pension reform act 2004, and the now subsisting pension reform act, 2014 pra 2014 except for the exempted public officers who continue to enjoy gratuity benefits. Full page photo stanbic ibtc pension managers nigeria. And for related mainers enacted by the national assembly of the federal republic of nigeria iobjectives and application t. Distinguished ladies and gentlemen, on behalf of the board, management and staff of the national pension commission pencom, i am delighted to welcome all of you to this important conference on the developments ushered in by the pension reform act. The new pension act 2014 is an eye opener of the obvious benefits in the contributory scheme. Fears over amendment of pension reform act nigeria. In the next section, the pension reform act of 2004 is explored in great detail by looking at some of the provisions. This is especially as the principal beneficiary of the pension scheme is the. The cost of the new pension law employment and hr nigeria.