FEATURES OF THE CONTRIBUTORY PENSION SCHEME:
There are three main objectives of the contributory pension scheme and these are:
- To ensure that retirement benefits are as and at when due
- To assist improvident employees to save towards their retirement
- To establish uniform set of rules for pension administration in the whole of Nigeria. In essence transfers from state to federal to private will not have any effect on your retirement benefits
Every employees is expected to have a retirement savings account with a pension fund administrator of his choice into which monthly contributions by the employer and employee are credited into.
There are two main types of benefits available in a contributory pension scheme setting and these are: the lump sum and secondly the monthly income which can be in the form of a programmed withdrawal/life annuity benefit. There is no scale of benefit as is available under the defined benefit scheme.
The Buildup in your Retirement Savings Account at retirement is what determines the quantum of benefits receivable