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Corporate Pensions

Contributory Pension Scheme (CPS)

The Pension Reform Act empowers the employee to choose his/her Pension Fund Administrator (PFA), open and maintain a Retirement Savings Account (RSA).

Monthly Contributions (which should not be less than 18% of employee’s Basic, Housing and Transportation allowances) from employees and employers are transferred into individual RSAs for effective management by the PFA. The RSA can be transferred once a year if the employee is dissatisfied with the services of the existing PFA. This is however subject to the Transfer Window Guidelines and approval by National Pension Commission - PenCom. Employees’ access to the contributions in the RSA is as prescribed under the Law. Click here for provisions of the CPS

A scheme that existed prior to the commencement of the Contributory Pension Scheme; which promises to pay out an income based on how much an employee earns at retirement.

The benefit under the scheme is defined in terms of parameters (length of service, vesting scale right etc) to be used in calculating the benefit payable at retirement. Most DBS are funded by employers. The Pension Reform Act 2014 requires that all DBS be transferred to Pension Fund Administrators.

As the term implies, VC allows RSA holders to make extra savings toward retirement.

In line with the Pension Reform Act, we encourage our clients to engage in the VC scheme in order to enhance their living standard at retirement or plan for a future project.

  • An existing Retirement Savings Account is a prerequisite for VC
  • It attracts the same return on investment as your CPS
  • RSA holder determines how much to contribute to VC
  • The contributions must come through the employer
  • VC is accessible any time but the return element on the contributions will be taxed if withdrawal is before five years from date of contribution

This is a lump sum retirement benefit provided by the employer to reward qualified employees for their meritorious service.

Though, not a compulsory scheme under the Pension Reform Act 2014, employer is not prevented from establishing a Gratuity Scheme in addition to the mandatory Contributory Pension Scheme (CPS) or DBS as the case may be. At NLPC PFA, we assist organizations, desirous of operating gratuity schemes to ensure smooth and effective administration of the scheme for mutual benefit of workers and employers.