Private means the scheme is built around the private individual, the benefits are that the pension funds are portable and ownership remains of the individual contributor.
Funded means there is a pool set aside to pay your pension funds; this means you will not have to worry when you retire how your pensions will be paid.
Professionally managed means the assets are managed & invested by Pension Fund Administrators (PFA) licensed by the National Pension Commission (PenCom).
Contributory means both the employer and the employee contribute to the Retirement saving account (RSA) of the employee.
These are the personal accounts, sort of similar to bank accounts that every pensioner will open with a PFA. It is this account that all pension contributors will be paid into. Any statutory contributions made into this account are tax-exempt. Legacy PFA will issue a report on the status of the RSA to each contributor.
Olusegun Fowora is a director on the board of 4 companies one of which is the renowned WSTC Financial Services a leading stock broking firm in the Country. He is a member of both the Royal Institute of British Architects and the Nigerian Institute of Architects.
Each employee is expected by law to receive a pension on retirement. Hence each individual employer will open an RSA with a PFA. The Pension Fund Administrator (PFA) will give the employee a Personal Identification Number (PIN) and bank details to forward to his employer. Every month the employer will remit a portion of the employee salaries plus the employer contribution
No, the scheme has segregated the functions of managing the RSA’s from that of physical custody of the assets. Your money will be paid to the Pension Fund Custodian (PFC), who will advise the PFA you have chosen, the PFA will instruct the PFC on how the money is to be invested. This segregation is to enhance the safety of the contributors pension assets.
THE PFC’s are licensed by the PenCom to hold the pension assets in Custody, to become a PFC an entity must have N2Billion paid up capital and belong to a group that has N125 Billion in total assets. The PFC will also issue a bond for the total assets they hold for the contributors. This ensures the safety of the assets.
Only PFA have the letters (PFA) after their names, e.g. Legacy (PFA) they are the only institution registered by law to manage Retirement saving accounts.
Nothing really changes. The RSA remains the property of the contributor for life. You should simply inform your new employer of your PIN number so contributions can be made into your RSA.
The Act specifies a minimum of 7.5% of your monthly basic salary, housing and transport allowance, except for the military, which requires 12.5%. Thus the total amount in your RSA every month should be 15%. However your employer can elect to bear the full burden of the contributions provided the total contributions into your RSA are not less than 15% of your monthly basic, salary, housing and transport allowance,
No, you are just saving part of your salary towards your retirement. In effect you can argue that you are receiving an addition since your employer is adding 7.5% of his own contribution.
Every employee in the public service except workers who have 3 year or les to retire, as well as persons under Section 291 of the constitution of the FGN.
Every employee in the private sector who is in the employment of an organization, which has 5 or more workers.
Under a Defined Benefit (DB) scheme, the benefits are defined, thus the final pension a contribution can receive is pegged. However under a Defined Contribution (DC) the contributions are defined hence the final pension is a function of how well the contribution paid by both the employer and employee have been invested by the PFA. Under the DC the scheme is immediately funded, thus payments are made as at when due.
The regulators PenCom license and constantly regulate all operators in this scheme. Legacy operations are hooked up via secure networks to the PenCom, who can review our operations. Legacy also files regular reports with the PenCom on our portfolio and compliance with rules and regulation of the scheme.
The assets of the contributors are fully separated from that of Legacy PFA. The assets cannot be used to settle judgment debt, or form part of the assets of Legacy PFA in a bankruptcy proceeding. Legacy PFA cannot use the contributions as collateral for a loan. The PFA also have appointed a Compliance Officer that ensures all the dealing of Legacy PFA complies with the provisions of the Pension Reform Act 2004.
Your savings will not be affected as the PFC holds the assets. Your savings are however invested in a diversified portfolio of stock, bonds and real estate.
Yes, Legacy is required by law to provide reports to the contributors. Legacy pension software will also allow you access your pension account online. You can also call our service centers to get a summary of your statement or simply visit and access your account through our dedicated service terminalsmy contributions?
Yes upon the later of either retirement or attainment of 50 years, and then only to the extent that what is left in you RSA is sufficient to guarantee that at least 50% of your last salary will be paid to you monthly through an Annuity or a Programmed withdrawal.
If you retire before the age of 50 years in accordance with your employment terms and conditions, you may withdraw a lump sum not more than 25% of the amount in your RSA, provided you withdraw the money six months after retirement and you have not secured another employment.
A programmed withdrawal is the method by which an employee collects his accumulated benefits in periodic sums for the length of his estimated life span. Legacy can offer you 5 separate options to choose from in planning your programmed withdrawal.
An annuity is an Income purchased from a licensed life insurance company approved by the commission with monthly or quarterly payments during the lifetime of the retiree
Yes, but under a different arrangement, a retiree can withdraw a lump sum from the balance of his retirement savings account provided the balance after the withdrawal could provide an annuity of fund monthly payments that would not be less than 50% of his monthly pay as at the date of his retirement.
The employer may pay gratuity over and above the scheme payments.
Every employee right to accrued pensions is guaranteed under the Act. In the case of the public sector where the scheme was unfunded, the pension benefits will be acknowledged through a federal government retirement bond, which shall be redeemed upon the retirement of the employee. In anticipation of the redemption of the bond the FGN shall establish a retirement Benefit Bond Redemption Fund at the CBN into which it shall pay 5% of the total wage payable to the employees on a monthly basis.
In the case of funded private schemes, the employer shall credit the RSA of its employees with any funds to which each employee is entitled and to the event of a deficiency, the shortfall shall become a debt and treated with the same priority as salaries owed. The employer shall also issue a written acknowledgement of the debt and take steps to meet the shortfall.
Your employer is required by law to take out a Life Assurance policy on your behalf for the value of three times your annual salary. This policy will be paid into your RSA and distributed in the following order
1. In favor of the beneficiary under a will or
2. The spouse and children of the deceased or in the absence of the wife and kids
3. To the recorded next-of-kin, or any person designated by him during his life time or
4. In the absence of such designation to any person appointed by the probate registrar as the administrator of the estate of the deceased. Please note you can specify in what ratio to share your RSA if you have more than one wif
These are private sector schemes that existed before the Act. They can continue to exist if they can show they were fully funded and that any shortfall is made up within 90 days. The pension assets must be segregated from the assets of the employer /company and transferred/held by a custodian.
The employer must have managed pension assets for at least 5 years before the commencement of the Act. Most importantly scheme asset must be N500m and above.
NSITF is now established as a PFA, NSITF will send you a statement of you account. However you cannot move your assets out of NSITF for a 5-year period
1. The Dutch Financial Services Group ING of the Netherlands set up legacy under a Technical Partnership service. ING has considerable experience in Pensions and Insurance and is present in 50 countries. This means our processes risk management and investment management service is built on world-class structures.
2. Considering the contributory scheme as similar to the Chilean model Legacy uses the Sonda AFP.NET software. This software was developed in Chile has been in use in the Americas and Eastern Europe.
3. All our staff are employees, this ensures that the same legacy people will deal with your account and understand your unique needs.
4. All our pension consultants go through our Legacy Training Academy, where they are exposed to world-class pension administration and Investment training. This guarantee you have experienced advisers at your disposal.
5. Legacy allows you the option of investing in an Ethical manner in managing your RSA. Hence you can exclude certain investment from being included in your RSA.
6. Legacy will offer you 5 options in executing your Programmed withdrawal, this provides you with choice and flexibility when you retire
7. You can access your RSA status trough 5 separate means Physically visiting Legacy, Visiting our Custodian, accessing our web sit, calling into our call centers, through your mobile phone.
