Nigeria’s pension is contributory and the money is yours. It sits in a Retirement Savings Account in your name with a Pension Fund Administrator, not in a government pot. That is the reform the Pension Reform Act 2014 delivered, and it is the reason the account follows you between jobs.
What comes off
| Who | Rate | Of what |
|---|---|---|
| You | 8% | basic, housing and transport |
| Your employer | 10% | the same |
| Total | 18% |
The base matters more than most people realise. Contributions are on basic, housing and transport allowance — not on gross pay. Two people on identical gross salaries with different salary structures build different pensions and pay different tax.
An employer may elect to bear the whole thing, in which case it must be at least 20%.
An employer with fewer than 15 employees is outside the mandatory scheme entirely.
Opening the account
You open the RSA yourself, with a Pension Fund Administrator of your choice, and give the PIN to your employer. It is not your employer’s account and not your employer’s choice.
You need your NIN. Everything downstream of identity in Nigeria does.
You can transfer between PFAs through the RSA Transfer System, once a year.
When you can touch it
At 50, or on retirement, whichever is later. Then you may take up to 25% as a lump sum, with the rest funding a programmed withdrawal or an annuity.
There is one earlier route. If you lose your job before 50 and are still out of work 4 months later, you may draw up to 25% of the balance.
Check that it is actually being remitted
This is the part worth acting on.
An employer that deducts your 8% and does not remit it has committed an offence, and it happens. The deduction shows on your payslip whether or not the money arrived.
Get your PFA’s statement — most send one quarterly, and all have an app — and check that the contributions landed, monthly, in the months you were paid. Do this now rather than at 50. Arrears are recoverable and PenCom does pursue them, but only if somebody notices.
The rest of the payroll stack
Two more statutory items appear around your salary:
- National Housing Fund, 2.5% of basic, deducted from you
- Employee Compensation Scheme, 1% of payroll, paid by your employer alone — this is the workplace injury scheme, and it costs you nothing