Key facts about the pension reform act 2014 vanguard news. The interpretation act provides that where no date of commencement is contained in an act, the commencement day shall be the day the act is passed or signed into law. Pension reform in nigeria article pdf available in global social policy 82. A critique of pension reform act, 2004 in nigeria anyim. For the provisions of the pension act to apply to employees in the private sector, the employer must have 5 or more employees in its employment. Comparison of chilean and nigerian mandatory pension system 60 2. 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. Although the workmens compensation act wca sought to compensate employees for loss suffered. Gratuity benefits under the pension reform act, 2014. It established for the public service of lagos state, a contributory pension scheme for the payment of retirement benefits of employees in the service to whom the scheme applies.
Aug 14, 2014 the life insurance policy must be purchased from a life insurance company licensed by naicom under the insurance act 2003. On 01 july 2014, the president of the federal republic of nigeria signed into law the pension reform act, 2014 the 2014 pra. To remedy some of these problems, the nigerian government recently passed into law the pension reform act, 2004 the pension act. Pension reform act 2014 key highlights and salient points. Ethno religious crisis and the challenges of sustainable development. A contributory pension scheme was established for every employee under the pension reform act 2004. An appraisal of the concept of trust in the nigerian. An appraisal of the concept of trust in the nigerian pension. Sep 25, 2017 presently, there are some bills before the national assembly, aiming to amend some sections of the pension reform act 2014. Pension reforms and challenges of implementation the. Short title 3 national assembly service act, 2014 page a1526 printed and published by the federal government printer, lagos, nigeria fgp 9072014 1,200. The rationale behind the new scheme is to make both employers of labour.
Commencement date the pension reform act 2014 act was signed into law by the president on 1 july 2014. 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. 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. 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. The scheme covers all pensionable employees in the public service of. The pra establishes a contributory pension scheme whereby the employers and the employees contribute minimum percentages of the employees salary to the scheme every month. The lagos state pension reform law lagos state pension. Jan 19, 2016 though the 2014 amendment to the pension reform act rectified the omission in 2004 act, the fact that only about 10 states out of 36 states have completed the process of legislation, and full. Regulatory and supervisory frameworks under cps in nigeria. 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. With the coming into force of the pension reform act 2004, the nigerian pension system was, to say the least, overhauled. The new pension reform act 2014 replaces the old pension reform act of 2004 and. Home finance key facts about the pension reform act 2014 key facts about the pension reform act 2014 on may 11, 2015 12. The pension reform act 2014 came into effect on 1st july 2014.
Dangers of amending pension act 2014 the guardian nigeria. Fears over amendment of pension reform act nigeria business. Read all the latest news, breaking stories, top headlines, opinion, pictures and videos about pension reform act from nigeria and the world on today. It is also important to state that you can only access 25% of your retirement savings account once in a lifetime. Group life insurance cover compulsory for employers new. In nigeria, the pension reform act 2014 pra governs the framework and procedure for pensions, and so we will reference it a lot in this article. 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 encapsulated the policies of the federal government of nigeria to solve the pension challenges in the country. The president of the federal republic signed the pension reform act 2014 the act into law on 1st july 2014. The enactment of pension reform act amendment 2014, which among others, seeks to put paid to the era of impunity and widespread corruption in various pension departments, is expected to enhance.
In addition, each employer is required to obtain an insurance certificate from the insurer and display a copy of the insurance certificate in a conspicuous place within the premises, for the information of the employees, as. To achieve this objective the paper divided into four parts. The new act serve as the enabling legislation for the administration of the contributory pension scheme. The attention of the national pension commission pencom has been drawn to an online article titled pencom recruitment 20202021, which directs the general public particularly persons seeking employment to visit the link. Ratings for the economic reform and governance project ergp for nigeria were as follows. The life insurance policy must be purchased from a life insurance company licensed by naicom under the insurance act 2003. Pension reform act 2014 the good, the bad and the ugly. The old pension scheme of 1962, as amended in 1993 was relatively favorable to workers elekwa 2011.
This paper seeks to examine the future of pension administration in nigeria. Nigeria economic reform and governance project english. Public procurement reforms, implementation, compliance abstract the public procurement in nigeria has come to stay. Impact of contributory pension scheme on workers savings and. Thereafter, the problems and characteristic features associated with the old pension scheme is examined.
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. On 1 july 2014, president goodluck jonathan signed into law the new pension reform act 2014 which repealed the pension reform act no. May 30, 2017 the pension reform act 2014 came into effect on 1st july 2014. Jul 10, 2014 the new pension act 2014 is an eye opener of the obvious benefits in the contributory scheme. Comparison between the old and new pension scheme 58 2. Key facts about the pension reform act 2014 key facts about the pension reform act 2014 on may 11, 2015 12. T he federal republic of nigeria official gazette fgn lagos. Application form a this is the duly completed and signed. Before the 2004 federal pension reform act, most state governments and companies in nigeria operated under the defined benefits pension scheme, popularly referred. Impact of contributory pension scheme on workers savings.
The lagos state pension reform law 2007 was signed into law on 19th march 2007. Section 1 of the act state the objectives of the contributory pension scheme. In the next section, the pension reform act of 2004 is explored in great detail by looking at some of the provisions. I any amount payable as a retirement benefit under this act shall not be taxable. Please tick box x to indicate all documents provided 1. Nigeria economic reform and governance project english abstract. 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. Presently, there are some bills before the national assembly, aiming to amend some sections of the pension reform act 2014. And for related mainers enacted by the national assembly of the federal republic of nigeria iobjectives and application t.
Gratuity benefits under the pension reform act, 2014 legal. Checklist requirements for 25% application nigeria. Pension reform act news latest breaking stories and top. Jul 10, 2014 pension reform act, 2014 the pension reform act was sign into law by president goodluck jonathan on 1 july 2014. Implications of the pension reform act vanguard news. The first part of the paper considers a brief history of the pension system in nigeria. The new pension act 2014 is an eye opener of the obvious benefits in the contributory scheme. What you should know about pensions in nigeria lawpadi. 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 of 2004 ushered in a contributory pension scheme cps that is fully funded, privately managed and based on individual accounts for both the public and private sector employees in nigeria pencom, 2005. Though the 2014 amendment to the pension reform act rectified the omission in 2004 act, the fact that only about 10 states out of 36 states have. National pension commission regulators of the nigerian. The crux of the act is the creation of an open and fair system of. Paper presented at the national seminar on pension fraud in nigeria. Workmens compensation act wca sought to compensate employees for loss suffered following industrial and other work related mishaps, this act had several shortcomings, which led to its replacement with the employees compensation act, 2010 the act or eca. Establishment of a contributory pension scheme for employee in the public and private sectors. The act also established the national pension commission pencom as the sole regulator. 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. Pension reform act, 2014 the pension reform act was sign into law by president goodluck jonathan on 1 july 2014. The national pension commission pencom is convening a conference for directors of licensed pension operators to promote capacity building and institutional strengthening of pension operators in order to foster a sound pension industry anchored on good corporate governance that is august 21, 2019.
The challenges of employers, employees and union leaders held at asaba, delta state. 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. May 25, 20 the lagos state pension reform law 2007 was signed into law on 19th march 2007. For the provisions of the pension act to apply to employees in the private sector, the employer. Pensions and pension reform in nigeria springerlink. Fears over amendment of pension reform act nigeria. All the while, pension reform accommodates staff of private and public sectors.
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