Pension
There is an established Contributory Pension Scheme where employers and employees are mandated to contribute monthly to maintain a Retirements Savings Account (RSA) in employees' names with any Pension Fund Administrator of choice.
This scheme's savings are accessible at retirement at the age of 50 or after six months of retirement if they retire earlier before 50 years of age. If a person retires before reaching the age of 50 years due to mental or physical incapacity, they can have immediate access to their RSA. The amount of pension issued after retirement depends on the balance in the employee's RSA account. The pension cannot be less than 50% of their monthly pay at the time of retirement.
Contributions to the pension fund are tax-deductible, and the pension payments are exempt from tax.
Dependents/Survivors Benefits
In case of an employee's death, the employer must pay the benefits of the life insurance policy (a minimum of three times the Annual Total Emolument (ATE) of the employees) to the dependents named by the employee. Usually, the employee's widow/widower and children are considered as dependents, but, in certain circumstances, the employee can choose to name other dependents. Dependent children receive compensation until the age of 21 years.
In the event of an employee's death due to an occupational injury, dependents are also entitled to compensation at the rate of 30 to 90% of the deceased's last monthly salary. This benefit is paid from contributions made by employers.
Invalidity Benefits
The Contributory Pension Scheme mandates employees and employers to make monthly contributions to employees' Retirement Savings Account (RSA). In the event of early retirement from work (before the age of 50 years) due to permanent disability, an employee can withdraw up to 25% of the amount in their RSA and start a monthly or quarterly pension with the remaining amount in the account.
Employers are also required to have an Employees' Compensation Fund, maintained by the Nigeria Social Insurance Trust Fund, for the following purposes:
- Payment of adequate compensation to all employees or their dependents in case of injury, disease, or disability arising out of or in the course of employment
- The provision of rehabilitation to employees with work-related disabilities
Payment of benefits for work-related disability depends on the type and degree of disability.