The Contributory Pension Scheme
is an arrangement where both
the employer and the employee
contribute towards the payment of
the employee’s pension at retirement.
It is fully funded through the monthly pension contributions that are remitted into an employee’s Retirement Savings Account (RSA) managed by a Pension Fund Administrator (PFA)
The main objective of the CPS is to ensure
that every that worked in either the
Public or Private Sectors in
his/her retirement benefits as when due.
The CPS covers all employees in the Public Service of the Federation, Public Service of the Federal Capital Territory, States, and Local Governments, the Private Sector.
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Who Receives the Monthly Pension Contributions Remitted by the Employer on Behalf of Employees?
- Pension contributions are paid directly to the PFC by the employer to be held on the order of the PFA. The PFC notifies the PFA immediately upon receipt of the contributions.
Can an Employer Contribute More than the Stipulated 10% Minimum Pension Contribution?
- An employer may agree on payment of additional benefits to the employee upon retirement or elect to bear the full responsibility of the scheme provided the total amount contributed by the employer should not be less than 18% of the employee’s monthly emoluments.
Can an Employee Make Voluntary Contribution into his/her RSA?
- Yes, the scheme allows employees to, in addition to the 18% employee and employer contributions make voluntary contributions into their RSAs.