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Retirement plans for our workers robust, says NB

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NIGERIAN Breweries, NB, Plc, has said retirement plans for its workers are very robust, aimed at ensuring a comfortable life after retirement.

Managing Director/Chief Executive Officer, CEO, of the NB, Mr.Nicolaas Vervelde, at a briefing in Lagos, ahead of the Company’s Annual General Meeting, AGM, said “a defined contribution plan is a post-employment benefit plan (pension fund) under which the Company pays fixed contributions into a separate entity.

The Company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. In line with the provisions of the Pension Reform Act 2004, the Company has instituted a defined contribution pension scheme for its permanent staff.

“Staff contributions to the scheme are funded through payroll deductions while the company’s contribution is recognised in profit or loss as employee benefit expense in the periods during which services are rendered by employees.

Employees contribute six per cent of their basic salary, transport and housing Allowances to the Fund on a monthly basis. The company’s contribution is 11 per cent and nine per cent of each employee’s basic salary, transport and housing allowances for non-management and management employees respectively.”

According to him, “the company currently operates two gratuity schemes, a defined benefit scheme and a defined contribution scheme: The company has a defined benefit gratuity scheme for certain employees. The company’s net obligation in respect of defined benefit scheme is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods and that benefit is discounted to determine its present value. In determining the liability for employee benefits under the defined benefit scheme, consideration is given to future increases in salary rates and the company’s experience with staff turnover.

“The recognized liability is determined by an independent actuarial valuation every year using the projected unit credit method. Actuarial gains and losses arising from differences between the actual and expected outcome in the valuation of the obligation are recognized fully in other comprehensive income.

The effect of any curtailment is recognized in full in the profit or loss immediately the curtailment occurs. The discount rate is the yield on Federal Government of Nigeria issued bonds that have maturity dates approximating the terms of the company’s obligation. Although the scheme is not funded, the company ensures that adequate arrangements are in place to meet its obligations under the scheme.

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