A Nigerian pension is a pot, not a promise. What you retire with is what went into your Retirement Savings Account and what it earned there — so the useful questions are how much is going in, and what that could add up to.
Nigerian pension calculator
See what you and your employer pay into your Retirement Savings Account each month, and what it could come to by retirement in today's money, at a return you choose.
What goes in
| Who | Rate | Of what |
|---|---|---|
| You | 8% | basic, housing and transport |
| Your employer | 10% | the same |
| Together | 18% |
These are minimums, under section 4 of the Pension Reform Act 2014. An employer may pay more, and one that bears the whole contribution must pay at least 20%.
The base is the part people miss. Contributions are on basic, housing and transport, not on gross pay, so a package that moves money into other allowances puts less into your RSA every month. The calculator opens on the ₦400,000 salary the salary calculator works through: ₦400,000 of it is pensionable.
The scheme is compulsory for an employer with 3 or more employees.
What the projection can and cannot tell you
There is no formula to look up. A pension of the old civil service kind paid a share of your final salary; an RSA pays out what it holds. So a projection has to assume two things, and both are in plain view:
- The return. You set it, after inflation. It starts at zero, which means the fund only keeps pace with prices. Nothing guarantees even that: in years when inflation outruns the fund, the pot shrinks in real terms. Your PFA publishes what each of its funds has returned, and that is the place to look before you move the setting.
- Your pay. It is assumed to rise with prices and no faster, which is what “in today’s money” means. A promotion puts more in; years out of work put nothing in.
The answer is therefore a way of asking “is this enough?”, not a forecast of the naira figure you will be paid.
When you can touch it
At 50, or on retirement, whichever is later. Your PFA then splits the balance between a lump sum and a programmed withdrawal or an annuity for life. The Act sets no fixed share for the lump sum: it is whatever leaves enough behind to pay that income.
Lose your job before 50, stay out of work for 4 months, and you may draw up to 25% of the balance with PenCom’s approval.
Check what has actually arrived
The 8% shows on your payslip whether or not your employer remitted it. Compare your PFA’s statement with your payslips, month by month. Unremitted contributions are recoverable, and PenCom pursues them — but only once somebody notices.
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