It is important that you introduce and confirm your Next-of-Kin to your Pension Fund Administrator for record purpose because no one knows when Mr. Death may come calling.

Many contributors under the Contributory Pension Scheme, CPS, expect that when they retire, their Pension Fund Administrators, PFAs, will automatically begin to pay them their retirement benefits. However, these contributors fail to realise that they need to inform their PFAs six months to their retirement so that the necessary verification exercise will be carried out on them to enable them access their retirement benefits on time and retire with ease.

However, instances have proved that many contributors are not aware of this fact; consequently, they wait till after retirement only to be told that they should have done verification six months before.

The necessary steps to take before retirement are:

Liaise with PFA within six months to retirement.

Supply PFA with official notice of retirement from employer.

Provide other documents required by the PFA.

Re-introduce/confirm Next of Kin to PFA before/at retirement.

Provide details of bank account for receiving retirement benefits.

Provide contact address after retirement.

Negotiate mode of withdrawal of benefits with PFA (programmed withdrawal or annuity).

Objectives of the CPS

The Contributory Pension Scheme, CPS, seeks to, amongst others, ensure that every worker receives his retirement benefits as and when due.

The scheme is contributory and mandatory.

Employer contributes 10%, while employee contributes 8% of employee’s annual emolument into the Retirement Savings Account (RSA) opened by the employee.

An employer may however elect to contribute the entire 18% on behalf of its employees.

In addition, voluntary contributions are allowed.

Scheme is mandatory for employees of the Federal Government, the Federal Capital Territory (FCT) and private sector organizations with three or more employees.

Contributions are remitted into individual Retirement Savings Account (RSA) & fully funded (100% asset backing).

RSAs are privately managed by Pension Fund Administrators (PFAs) and custody of assets is maintained by Pension Fund Custodians (PFCs).