• Wednesday, May 29, 2024
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Preparing to retire


Preparing to retire from employment, a contributor in the nation’s Contributory Pension Scheme (CPS) has a responsibility to support his easy and stress-free exit. This means that the employee, either in the public or private sector should as a matter of importance, should ensure that he starts documentation process at least six month before exiting.

Note that having access to your documents or getting assistance from fellow employees on trying to assemble your documents is usually much easier while you are still in the system. The moment you are out of the employment, you might need to fill forms to see your former colleagues and that you may not like.

Upon retirement or attaining 50 years of age (whichever is later), the balance on Retirement Savings Account (RSA) can be utilised for lump sum payment provided the balance on the RSA afterwards is sufficient to procure a Programmed Withdrawal or Annuity for life in line with National Pension Commission (PenCom) guidelines.

•Programmed monthly or quarterly withdrawal from PFA or

•Annuity for life from Life Insurance Company

•If the terms and conditions of employment allow retirement before 50 years, the Contributor can access 25 percent of the balance on RSA

•Upon disengagement or resignation before the age of 50 and does not secure another job within 4 months, you can also access 25 percent of the balance on the RSA Public Sector Employees are to attend the PenCom verification and enrolment exercise, the year before the retiring year. This ensures the remittance of accrued benefits and rights.

The following are documents require for the exercise:

•Certified copy of first appointment letter;

•Record of service by the MDA/Ministry;

•Last Promotion Letter;

•Certified Copy of June 2004 Pay slip;

•Passport Picture; and

•Birth Certificate/Age declaration

•PFAs are to notify public and private sector RSA holders within 6months to retirement.

READ ALSO: What’s the point of saving for retirement in your 20s?

Requirements for Accessing Retirement Benefits

Public sector

•Copy of official notice of retirement from employer.

•Payslip for any of the last three months before retirement month.

•Copy of the PenCom Retirement Benefit Registration Slip.

•One passport photograph.

Private sector

•Official notice of retirement from employer.

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•Payslip for any of the last three months before retirement month or evidence of annual remuneration.

•Letter from ex-employer confirming status of outstanding remittance (Accrued Pension Right).

•One passport photograph.

•Age Declaration/Birth Certificate.

Medical grounds

•Certified true copy of a medical certificate issued by a properly constituted Medical Board or a suitably qualified physician;

•The letter of notification of retirement issued by the employer also authenticating the medical certificate; and

•All other requirement, based on the category of application (i.e. public or private).

Deceased benefits

|*The PFA shall establish the identity of the Next-of-Kin and shall demand for:

•Certified True Copies of Letter of Administration or Will admitted to Probate.

•Certificate of registration of Death or other evidence

•Payment is made to the beneficiary named in the Will or persons named in the

Letter of Administration or other Court documentation.

Missing person

•The processing of benefit in case of missing person, the employer and/or

Next-of Kin shall notify the PFA of the disappearance of the employee/retiree after a minimum period of 12months following the disappearance of the missing person.

•The Next-of-Kin shall provide a satisfactory means of identification and a Police report confirming that the person has been missing with effect from the reported date, the circumstance of the disappearance and that the person has not been found after 12months.

•Letter of confirmation of disappearance from the employer (if inactive employment at the time of disappearance) also bearing the passport photograph of the missing person.

•The objectives of the Pension Reform 2014 is to establish a uniform set of rules, regulations and standards for the administration and payments of retirement benefits for the public service of the federation, the public service of the federal capital territory, the public service of the state government, the public service of the local government councils and the private sector.

Other objectives are Make provision for the smooth operations of the contributory pension scheme; Ensure that every person who worked in either the public Service of the Federation, Federal Capital Territory, States and Local government or the Private Sector receives his retirement benefits as and when due; and assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age.

The provisions of this Act shall apply to any employment in the public service of the Federation, the public Service of the Federal Capital Territory, the Public Service of the state, the public service of the local governments and the private sector.

In the case of the Private Sector, the Scheme shall apply to employees who are in the employment of an organisation in which there are 3 or more employees.

Notwithstanding the provision of subsection (2) of this section, employee of organisation with less than three employees as well as self-employed persons shall be entitled to participate under the scheme in accordance with guidelines issued by the commission.