Chapter 6: Pensions and gratuity

Skills level

CHAPTER
Public Sector Accounting and Finance

6
Pensions and gratuity

Contents
6.0 Purpose
6.1 1999 Constitutional provisions
6.2 Pension Reform Act, 2014
6.3 Exemption from new Pension Reform Act 2014
6.4 Retirement benefits
6.5 Retirement Savings Account (RSA)
6.6 National Pension Fund Commission
6.7 Pension Fund Administration
6.8 Pension Fund Custodian
6.9 Refusal and revocation of licence of Pension Fund Administrator and Custodian
6.10 Minimum pension guarantee
6.11 Investment of pension funds and restricted investments
6.12 Offences, penalties and enforcement powers
6.13 Deficiencies of Pension Reform Act, 2014
6.14 Pension Transitional Arrangements Directorate (PTAD)
6.15 Pension provisions for private sector
6.16 Miscellaneous
6.17 Chapter review
6.18 Worked examples

© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 164
 Chapter 6: Pensions and gratuity

6 Pensions and gratuity

6.0 Purpose
After studying this chapter readers shouldbe able to:
(a) Discuss the provisions of 1999 Constitutional provisions
(b) Outline the objectives of Pension Reform Act 2014.
(c) Identify the categories of people exempted from Pension Reform Act 2014
(d) Discuss the powers and functions of the key pension administration institutions
(e) Discuss IPSAS 39 on Employees Benefits

6.1 1999 Constitutional provisions

(a) Section 173 (3) of 1999 Constitution says, “Pensions shall be reviewed every
five years or together with any Federal civil service salary reviews, which ever
is earlier.”

(b) Section 173 (4) of the Constitution stipulates, “Pensions in respect of service
in the public service of the Federation shall not be taxed.”

(c) According to Section 84 (5) of the 1999 Constitution, ‘’Any person who has
held office as President or Vice President shall been titled to pension for life at
a rate equivalent to the annual salary of the incumbent President or Vice-
President, provided that such a person was not removed from office by the
process of impeachment or for breach of any provision of this Constitution.”

(d) Section 84 (6) of the Constitution states that ‘’any pension granted by virtue of
sub section (5) of this section shall beach arge upon the Consolidated
Revenue Fund of the Federation.”

6.2 Pension Reform Act 2014

This Act repeals the Pension Reform Act 2004 and the Act continues to govern and
regulate the administration of uniform contributory pension scheme for both the public
and private sectors in Nigeria. The provisions of this Act shall apply to:

(a) Any employment in the Public service of the Federation, the Public Service of
the Federal Capital Territory, the public service of state governments, the
public service of local government councils and the private sector;

(b) In the case of the private sector, the scheme shall apply to employees who
are in the employment of an organization in which there are 15 or more
employees; and

(c) Employees of organisations 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.

© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 200
 Chapter 6: Pensions and gratuity

6.2.1Objectives of the new Pension Reform Act, 2014

(a) Establish a uniform set of rules, regulations and standard 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 state
governments, the public service of local government councils and the private
sector.

(b) Make provision for the smooth operation of the contributory pension scheme.

(c) Ensure that every person who worked in either the public service of the
Federation, the public service of the Federal Capital Territory, the public service
of state governments, the public service of the local government Councils and
the private sector receives his retirement benefits as and when due and
(d) Assists improvident individuals by ensuring that they save in order to cater for
their livelihood during old age.
6.2.3 The rates of contributions to the scheme
(i) The contribution for any employee to which this Act applies shall be made in
the following rates relating to his monthly emoluments:
(ii) A minimum of 10 percent by the employer.

(ii) A minimum of 8 percent by the employee.

(iv) These deductions should be made from the workers’ salaries at source, while
government’s contributions shall be a first charge on the Consolidated
Revenue Fund of the Federation.
(v) The rates of contribution may, upon agreement between any employer and
employee, be revised upwards, from time to time, and the Commission shall
be notified of such revision.
(vi) Any employee may, in addition to the total contributions being made by him
and his employer, make voluntary contributions to his retirement savings
account.

(vii) Notwithstanding any of the provisions of this Act, an employer may agree on
the payment of additional benefits to the employee upon retirement; or elect to
bear the full responsibility of the scheme provided that in such case, the
employer’s contribution shall not be less than 20% of the monthly emoluments
of the employee.

(viii) In addition to the rates specified above, employers shall maintain life
insurance policies in favour of the employees for a minimum of three times the
annual total emoluments of the individuals.

(ix) Where the employer failed, refused or omitted to make payment as and when
due, the employer shall make arrangement to effect the payment of claims
arising from the death of any staff in its employment during the period.
© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 201
 Chapter 6: Pensions and gratuity

6.3 Exemption from new Pension Reform Act 2014- S 5(1)

The categories of persons exempted from the Contributory Pension Scheme are:

(a) The categories of persons mentioned in Section 291 of the Constitution of

the Federal Republic of Nigeria 1999 (as amended) including the members of
Armed Forces, the Intelligence and Secret Services of the Federation;

(b) An employee who is entitled to retirement benefits under any Pension Scheme
existing before the 25th day of June 2004 and has 3 or less years to retire (i.e.
Fully Funded Pension Scheme);

(c) Any person who falls within the provisions of (a) and (b) above shall continue
to derive retirement benefit under such existing pension scheme as provided
for in the Second Schedule to this Act attached below; and

(d) Where an officer exempted under (b) above dies in service or in the course of
duty, the Federal Government Pension Transitional Arrangements Directorate
and the Federal Capital Territory Pension Transitional Arrangements
Directorate shall cause to be paid, en-bloc, his next- of- kin or designated
survivors, gratuity and pension to which the officer would have been entitled at
the date of his death calculated on the basis of applicable computation sunder
the existing Pay-As-You-Go Pension scheme of the public service of the
Federation and Federal Capital Territory.

Computation of retirement benefits

Formula for calculation of pensions and gratuity in respect of retirement

Year of Gratuity as Pension as Year of Gratuity as Pension as

Qualifying percentage percentage Qualifying percentage percentage
service of final pay of final pay service of total final of total final
enrolment enrolment enrolment
----- ----- ----- 5 100 -----
----- ----- ----- 6 108 -----
----- ----- ----- 7 116 -----
----- ----- ----- 8 124 -----
----- ----- ----- 9 132 -----
10 100 ----- 10 100 30
11 110 ----- 11 108 32
12 120 ----- 12 116 34
13 130 ----- 13 124 36
14 140 ----- 14 132 38
15 100 30 15 140 40
16 110 32 16 148 42
17 120 34 17 156 44
18 130 36 18 164 46
19 140 38 19 172 48
20 150 40 20 180 50
© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 202
 Chapter 6: Pensions and gratuity

21 160 42 21 188 52
22 170 44 22 196 54
23 180 46 23 204 56
24 190 48 24 212 58
25 200 50 25 220 60
26 210 52 26 228 62
27 220 54 27 236 64
28 230 56 28 244 66
29 240 58 29 252 68
30 250 60 30 260 70
31 260 62 31 268 72
32 270 64 32 276 74
33 280 66 33 284 76
34 290 68 34 292 78
35 300 70 35 300 80

6.3.1 Supervision of retirement benefits of employees exempted from the scheme.

(a) The administration of the retirement benefits of the categories of employees
exempted from the Scheme under section 5(1) (b) of this Act shall be
subjectto the supervision and regulation of the Commission.

(b) In the case of professors covered by the Universities (Miscellaneous

Provisions) (Amendment) Act, 2012 and category of political appointees
entitled, by virtue of their terms and conditions of employment, to retire with
full benefits, the Commission shall issue guidelines to regulate the
administration of their retirement benefits provided that any shortfall shall be
funded from budgetary allocations by the employer.

(c) The Accountant-General of the Federation and the FCT Treasury, as the case
may be, subject to the framework developed jointly with the Commission, shall
make payments of retirement benefits directly into individual bank accounts of
retired persons covered under section 5 (1) (b) of this Act and details of such
payment shall be submitted to the Commission and the Pension Transitional
Arrangements Directorate of the Federation and Federal Capital Territory
established under sections 42 and 44 of this Act respectively.

6.4 Retirement benefits

6.4.1 Payment of retirement benefits

(i) A holder of retirement savings account shall upon retirement or attaining the
age of 50 years, whichever is later, utilise the balance standing to the credit of
his retirement savings account for the following benefits:

(a) Programmed monthly or quarterly withdrawals calculated on the basis

of an expected life span;

© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 203
 Chapter 6: Pensions and gratuity
(b) Withdrawal of a lump sum from the total amount credited to his
retirement savings account provided that the amount left after the lump
sum withdrawal shall be sufficient to procure a programmed fund
withdrawals or annuity for life in accordance with extant guidelines
issued by the Commission, from time to time;
(c) Annuity for life purchased from a life insurance company licensed by
the National Insurance Commission with monthly or quarterly
payments;
(d) Professors covered by the Universities (Miscellaneous Provisions
(Amendment) Act, 2012 shall be according to the University Act; or
(e) Other categories of employees entitled, by virtue of their terms and
conditions of employment, to retire with full retirement benefits shall
still apply

(ii) Where an employee retires before the age of 50 years, the employee may
request for withdrawal of lump sum of money of not more than 25 per cent of
the amount standing to the credit of the retirement savings account, provided
that such withdrawals shall only be made after six months of such retirement
and the retired employee does not secure another employment.

(ii) Where an employee has accessed the amount standing in his retirement
savings account pursuant to (ii) above, such employee shall subsequently
access the balance in the retirement savings account in accordance with (i)
above.

6.4.2 Death of employee

Where an employee dies:
(a) The entitlement under the life insurance policy maintained shall be paid to his
retirement savings account.

(b) The pension fund administrator shall add the amount paid from life insurance
policy in favour of the beneficiary under a will or the spouse and children of
the deceased or the absence of wife and child, to the recorded next of kin or
any person designated, by him during his life time or in the absence of such
designation, to any person appointed by the Probate Registry as the
administrator of the estate of the deceased, in line with the payment of
retirement benefit.

6.4.3 Where an employee is missing

Where an employee is missing and is not found within a period of one year from the
date he was declared missing, and a Board of Inquiry set up by the Commission
concludes that it is reasonable to presume that he has died,normal payment of
pension proceeding should be followed. That is to say that the employee’s
entitlements under the life assurance policy maintained shall be paid to his retirement
savings account.
© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 204
 Chapter 6: Pensions and gratuity

6.4.4 Exemption from taxes

(a) Contributions to the scheme areexempted from taxes under this Act and shall
form part of tax deductible expenses in the computation of tax payable by an
employer or employee under the relevant income tax law.
(b) All interests, dividends, profits, investment and other income accruable to
pension funds and assets under this Act shall not be taxable.
(c) Any amount pay able as a retirement benefit under this Act shall not be taxable.
(d) Any voluntary contribution shall be subject to tax at the point of withdrawal
where the withdrawal is made before the end of 5 years from the date the
voluntary contribution was made.

6.5 Retirement Savings Account (RSA)

6.5.1 Retirement Savings Account (RSA) and remittance of contribution

(a) Every employee to whom this Act applies shall maintain an account, (in this
Act referred to as “Retirement Savings Account”) in his name with any
Pension Fund Administrator of hischoice.
(b) The employee shall notify his employer of the Pension Fund Administrator
chosen and the identity of the retirement savings account opened under (a)
above.

(c) The employer shall:

(i) Deduct at source the monthly contribution of the employee;and
(ii) Not later than 7 working days from the day the employee is paid his
salary, remit an amount comprising the employee’s contribution under
paragraph (i) of this subsection and the employer’s contribution to the
Pension Fund Custodian specified by the Pension Fund Administrator
of the employee.

(d) Upon receipt of the contributions remitted under (c) (ii) above,the Pension
Fund Custodian shall notify the Pension Fund Administrator who shall cause
to be credited the retirement savings account of the employee for whom the
employer had made the payment;
(e) Where an employee fails to open such Retirement Savings Account within a
period of six months after assumption of duty, his employer shall, subject to
guidelines issued by the Commission, request a Pension Fund Administrator
to open a nominal retirement savings account for such employee for the
remittance of his pension contributions;
(f) An employer who fails to deduct or remit the contributions within the time
stipulated in subsection(c) (ii) above shall, in addition to making the remittance
already due, be liable to a penalty to be stipulated by the Commission;
(g) The penalty referred to in (f) above shall not be less than 2 percent of the total
contribution that remains unpaid for each month or part of each month the

© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 205
 Chapter 6: Pensions and gratuity
default continues and the amount of the penalty shall be recoverable as a debt
owed to the employee’s retirement savings account, as the case may be;
(h) employee shall not have access to his retirement savings account or have any
dealing with the Pension Fund Custodian with respect to the retirement
savings account except through the Pension Fund Administrator; and
(i) The Commissions hall determine the cost of recovery of un-remitted
contributions and the sources to defray the cost, which may include the
amount recovered as penalty pursuant to subsection (6) of this section.

6.5.2 Contributions of the Federal Government and Federal Capital Territory

Administration.
(a) The contributions of the Federal Government and Federal Capital Territory
Administration to the retirement benefits of employees of the Public Service
of the Federation under section 11 (3) of this Act shall be a charge on the
Consolidated Revenue Fund of the Federation and Revenue Fund of the
Federal Capital Territory respectively.
(b) The Accountant-General of the Federation and Federal Capital Territory
Treasury shall make the deductions of the contributions mentioned in
subsection (a) above.

6.5.3 Transfer of account from one Pension Fund Administrator to another

Subject to guidelines issued by the Commission, a holder of a retirement savings
account maintained under this Act may not, more than once in a year, transfer his
account from one Pension Fund Administrator to another.

6.5.4 Transfer from one employment toanother.

Where an employee transfers his employment from one employer or organisation to
another, the same retirement savings account shall continue to be maintained by the
employee or be transferred subject to section 13 of this Act (i.e. 6.5.3 above).

6.5.5 Transfer of entitlement from defined benefits scheme into thescheme.

(i) As from 25 June, 2004, being the commencement of the Pension Reform Act
2004, the accrued pension right to retirement benefits of any employee who is
already under any pension scheme existing before the commencement of that
Act and has over 3 years to retire shall:
(a) In the case of employees of the Public Service of the Federation where
the scheme is unfunded, be recognised in the form of an amount
acknowledged through the issuance of Federal Government
Retirement Benefits Bonds by the Debt Management Office in favour
of the employees and the bond issued under this subsection shall be
redeemed upon the retirement of the employee in accordance with
Section 39 of this Act and the amount so redeemed shall be added to
the balance of the retirement savings account of the employee and
applied in accordance with the provisions of Section 7 of this Act;
© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 206
 Chapter 6: Pensions and gratuity

(b) In the case of employees of the Federal Capital Territory where the
scheme is unfunded, be recognised in the form of an amount
acknowledged through the issuance of a bond to be known as Federal
Capital Territory Retirement Benefits Bonds, in favour of the employees
and the bond issued under this subsection shall be redeemed upon
retirement of the employee in accordance with Section 39 of this Act
and the amounts redeemed shall be added to the balance in the
retirement savings account of the employee and applied in accordance
with the provisions of Section 7 of this Act; and

(c) In the case of the employees of the Public Service of the Federation,
Federal Capital Territory or in the Private Sector, where the scheme is
funded, credit the Retirement Savings Accounts of the employees with
any fund to which each employee is entitled and in the event of an
insufficiency of funds to meet this liability the shortfall shall immediately
become a debt of the relevant employer and shall have priority over
any other claim.

(ii) Where there is such a debt the employer shall immediately issue a written
acknowledgement of the debt to the relevant employee and take steps to meet
the shortfall and such debt shall not be affected by the provisions of any
limitation law in force for the time being.

(ii) The employer shall notify the Commission of any written acknowledgment that
arises under (i)( c) above and any step taken or planned to meet the shortfall.

(iv) The accrued pension rights and entitlements of employees of the Public
Service of the Federation as provided for under (i) above shall be reviewed by
the Federal Government of Nigeria from time to time in line with the provisions
of Section 173(3) of the Constitution of the Federal Republic of Nigeria 1999
(as amended), provided that the variation so derived from the salary reviews
shall be provided by the Federal Government and credited directly into
retirement savings account of individual retiree.

(v) The accrued pension rights and entitlements of employees of the Federal
Capital Territory as provided for under(i) above shall be reviewed by the
Federal Capital Territory from time to time in line with the provisions of Section
173(3) of the Constitution of the Federal Republic of Nigeria 1999 (as
amended), provided that the variation so derived from respective salary
reviews shall be provided by the Federal Capital Territory and credited directly
into retirement savings account of individual retiree.

© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 207
 Chapter 6: Pensions and gratuity

6.5.6 Withdrawal from retirement savings account

The conditions, which govern withdrawal from the scheme, are as follows:
(a) Withdrawal is not allowed until the attainment of 50 years ofage;
(b) An officer who retired and is less than 50 years, on the advice of a suitably
qualified physician or properly constituted Medical Board, certifying that the
employee is no longer mentally and physically capable of carrying out the
function of his office, may withdraw;
(c) If the officer is retired due to his total or permanent disability either of mind or
body;
(d) Where the employee retires before the age of 50 years in accordance with
the terms and conditions of his employment, he shall be entitled to make
withdrawals;
(e) The Medical Board or suitably qualified physician,at there quest of the
employee, be made once in every two years to review the fitness of the
employee and where the Medical Board certifies that he is now mentally and
physically capable of carrying out the functions of his office, he may re-enter
the scheme upon securing another employment; and
(f) Without prejudice to (a) above, any employee who disengages or is
disengaged from employment before the age of 50 years and is unable to
secure another employment within four months of such disengagement may
make withdrawal from his retirement savings account in accordance with the
provisions of Section 7(2) and (3) of this Act.

6.5.7 Age of contributor

The authentic age of an employee entering the public service or any other
employment shall be that submitted by him on entering the service or taking up the
employment.

6.5.8 Dispute resolution

Any employee or beneficiary of a retirement savings account who is dissatisfied with
a decision of the Pension Fund Administrator or Custodian may request, in writing,
that the Pension Fund Commission should review such a decision.

6.6 National Pension Commission

6.6.1 Objectives
The principal objective of the Commission, according to the Pension Reforms Act,
2014, is “to regulate, supervise and ensure the effective administration of pension
matters in Nigeria.”
Other objectives of establishing the National Pension Commission are to:
(a) ensure that every person who works in the public service of the Federation,
FCT and private sector receives his retirement benefits as and when due;
(b) assist improvident individuals by ensuring that they save in order to cater for
their livelihood during old age; and
(c) establish a uniform set of rules, regulations and standards for the
© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 208
 Chapter 6: Pensions and gratuity
administration and payments of retirement benefits for the public service of the
Federation, Federal Capital Territory and the private sector.
6.6.2 Powers of the Commission
The Commission shall have power to:
(a) formulate, direct and oversee the overall policy on pension matters in Nigeria;
(b) fix the terms and conditions of service, including remuneration of th
eemployees of the Commission;
(c) request or call for information from any employer or pension administrator or
custodian or any other person or institution on matters relating to retirement
benefits;
(d) charge and collect such fees, levies or penalties, as may be specified by the
Commission;
(e) establish and acquire offices and other premises for the use of the
Commission in such locations as it may deem necessary for the proper
performance of its functions;
(f) establish standards, rules and regulations for the management of the pension
funds;
(g) investigate any Pension Fund Administrator, custodian or other party involved
in the management of pension funds;
(h) impose administrative sanctions or fines on erring employers or Pension Fund
Administrators or Custodians;
(i) order the transfer of management or custody of all pension funds or assets
being managed by a pension fund administrator or held by a custodian whose
licence has been revoked or subject to insolvency proceedings to another
pension fund administrator or custodian; and
(j) do such other things, which in its opinion are necessary to ensure the efficient
performance of the functions of the Commission.
6.6.3 Functions of the Commission
The functions of the Pension Commission as stated in S.23 of the Act are to:
(a) regulate and supervise the scheme established under this Act;
(b) issue guidelines for the investment of pension funds;
(c) approve, license, regulate and supervise Pension Fund Administrators,
Custodians and other institutions relating to pension matters as the
Commission may from time to time determine;
(d) establish standards, rules and guidelines for the management of the pension
funds under this Act;
(e) ensure the maintenance of a National Data Bank on all pension matters;
(f) carry out public awareness and education on the establishment and
management of the scheme;
(g) promote capacity building and institutional strengthening of pension fund
administrators and custodians;
(h) receive and investigate complaints of impropriety levelled against any pension
fund administrator, custodian or employer or any of their staff or agents; and
© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 209
 Chapter 6: Pensions and gratuity
(i) perform such other duties which, in the opinion of the commission, are
necessary or expedient for the discharge of its functions under the Act.

According to the pension reform,all employees in the service of the Federation,

Federal Capital Territory and private sector shall henceforth contribute certain
percentages of their monthly emoluments towards their retirement. However, this
reform will not apply to those who have less than three years to retire.
6.6.4 Composition of National Pension Commission
The Commission comprises:
(a) Apart-time chairman in possession of a University degree or its equivalent and
20 years experience.
(b) A Director-General who shall be the Chief Executive Officer of the
Commission and in possession of appropriate professional skills with not less
than twenty years cognate experience.
(c) Four(4)full time Commissioners, who shall each possess professional skills
and not less than 20 years cognate experience in Finance, Investment,
Accounting, Pension Management, Business Administration or Actuarial
Science.
(d) Representatives of:
(i) Head of the Civil Service of the Federation;
(ii) The Federal Ministry of Finance;
(iii) The Nigeria Union of Pensioners;
(iv) The Nigeria Employers’ Consultative Association;
(v) The Central Bank of Nigeria;
(vi) The Nigeria Labour Congress;
(vii) The Securities and Exchange Commission;
(viii) Trade Union Congress of Nigeria;
(ix) Nigerian Stock Exchange; and
(x) National Insurance Commission.

6.7 Pension Fund Administration

6.7.1 Application for a licence as Pension Fund Administrator.
A person proposing to operate as a Pension Fund Administrator shall apply to the
Commission for a licence in such form and with the payment of such fees as may be
prescribed by the Commission from time to time. The Commissionmay, if satisfied
that the applicant meets the requirements set out in 6.9.2 below or Section 60 of this
Act, issue a licence to the applicant to operate as a Pension Fund Administrator
subject to such terms and conditions as the Commission may consider expedient and
necessary in the circumstances.

© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 210
 Chapter 6: Pensions and gratuity

6.7.2 Requirements for licence as a Pension Fund Administrator

(i) An application for licence to operate as a Pension Fund Administrator shall not
be granted unless the applicant:
(a) Is a limited liability company incorporated under the Companies and
Allied Matters Act whose object is to manage pension funds;

(b) Has a minimum paid up share capital of such sum as may be

prescribed, from time to time, by the Commission;
(c) Satisfies the Commission that it has the professional capacity to
manage pension funds and administer retirement benefits;
(d) Has never been a manager or administrator of any fund which was
mismanaged or has been in distress due to any fault, either fully or
partially, of the Pension Fund Administrator or any of its subscribers,
directors or officers;
(e) Undertakes to the satisfaction of the Commission, that it shall not be
engaged in any business other than the management of pension
funds; and
(f) Satisfies any additional requirement or condition as may be prescribed,
from time to time; by the Commission.

(ii) All companies and institutions already engaged in the management of pension
funds who are not licensed by the Commission shall, at the commencement of
this Act, compute and credit all contributions to the Retirement Savings
Account opened by them for each contributor including distributable income.

(ii) All companies and institutions referred to in sub-section (ii) of this section shall
transfer all pension funds and assets held by them to Pension Fund
Administrators and Pension Fund Custodians as may be determined by the
Commission.

(iv) Pursuant to the provisions of Section 116 of the Companies and Allied Matters
Act, the voting rights of every shareholder in a Pension Fund Administrator or
Pension Fund Custodian shall be proportionate to his contribution to the paid-
upshare capital of the Pension Fund Administrator or Pension Fund
Custodian.

6.7.3 Functions of Pension Fund Administrators

Only Pension Fund Administrators licensed by the Commission shall manage pension
funds.
The Pension Fund Administrators shall carry out the following functions:
(a) open retirement savings accounts for all employees with personal identity
numbers (PIN) attached;
(b) invest and manage pension funds and assets;
(c) maintain books of accounts on all transactions;
(d) provide regular information on investment strategy, market returns and other
© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 211
 Chapter 6: Pensions and gratuity
performance indicators to the Commission and employees or beneficiaries of
the retirement savings accounts;
(e) provide customers’ service support to employees, including access to
employees’ account balances and statements on demand;
(f) process the calculations and payments of retirement benefits; and
(g) carry out other functions as National Pension Funds Commission may assign
from time to time.

6.7.4 Prohibited transactions

A Pension Fund Administrator shall not:
(i) hold any pension fund or asset;
(ii) keep any pension fund or asset with a Pension Fund Custodian in whom the
Pension Fund Administrator has any business interest, share or any
relationship whatsoever;
(ii) engage in any business transaction or trade in any manner with the Pension
Fund Administrator as a counter part or with the subsidiary in relation to
pension fund or assets; and
(iv) divert or convert pension funds and assets as well as any income or
brokerage, commission arising from the investment of pension fund or asset
or by any other means.
6.7.5 Prescribed structure of Pension Fund Administration
The following Standing Committees are required to carry out the Fund’s functions and
ensure compliance with the Act:
(a) Risk Management
(i) To determine the risk profile of the investing portfolios of the Pension
Fund Administrator.
(ii) Draw up programmes of adjustments in the case of deviations.
(iii) Determine the level of reserves to cover the risk of the investment
portfolios.
(iv) Advise the Pension Fund Administrators in maintaining adequate
internal control measures and procedures.
(v) Carry out such other functions relating to risk management as the
Pension Board may direct.
(b) Investment Strategy Committee
(i) Formulate strategies for complying with investment guidelines issued
by the Commission.
(ii) Determine an optimal investment mix consistent with risk profile
agreed by the Board of the Pension Fund Administration.
(iii) Evaluate the value of the daily `mark-to-market’ portfolios and make
proposals to the Board of the Pension Fund Administration.
(iv) On a periodic basis, review the performance of the major securities of
the investment portfolios of the Pension Fund Administration.
(v) Carry out such other functions relating to investment strategy as the
Board may determine from time to time.
© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 212
 Chapter 6: Pensions and gratuity

6.8 Pension Fund Custodians

6.8.1 Application for licence as Pension Fund Custodian
A person proposing to act as a custodian of pension funds shall apply to the
Commission for a licence in such form with the payment of such fees as may be
prescribed by the Commission, from time to time. The Commission may, if satisfied
that the applicant meets the requirements set out in 6.10.2 below or Section 62 of this
Act, issue a licence to the applicant to carry out the functions of a Pension Fund
Custodian prescribed under Section 46 of this Act.

6.8.2 Requirements for a licence as Pension Fund Custodian

Application for license to act as a Pension Fund Custodian shall not be approved by
the Commission unless such applicant:
(a) Is a limited liability company incorporated under the Companies and Allied
Matters Act by a licensed financial institution with sole object of keeping
custody of pension fund and retirement benefits’ assets;

(b) Has a minimum paid capital of such sum that may be prescribed by the
Commission from time to time and is wholly owned by a licensed financial
institution with net worth of a minimum of N25,000,000,000 or as may be
prescribed from time to time;

(c) Shows that the parent company has issued a guarantee to the full sum and
value of the cash float of pension funds and the Commission, from time to
time, may determine assets held by the Pension Fund Custodian,

(d) Undertakes to hold the pension fund assets to the exclusive order of the
Pension Fund Administrator on trust for the respective employees as may be
instructed by the Pension Fund Administrator appointed by each employee;

(e) Has never been a custodian of any fund which was mismanaged or has been
in distress due to any default of the Pension Fund Custodian; and

(f) Satisfies such additional requirements as may be prescribed from time to time,
by the Commission.

6.8.3 Functions of Pension Fund Custodian

Section 57 of Pension Reforms Act of 2014 states that Pension Fund Custodian shall
carry out the following functions:
(a) Receive the total contributions remitted by employers on behalf of the pension
fund administrators;

(b) Notify the pension fund administrators within 24 hours of the receipt of
contribution from any employer;

(c) Hold pension funds and assets in safe custody on trust for the employees and
beneficiaries of the retirement savings account;

(d) Settle transactions and undertake activities related to pension fund

© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 213
 Chapter 6: Pensions and gratuity
investments, including the collection of dividends and related activities;

(e) Provided at a and information on investment to the Pension Fund

Administration and the Commission;

(f) Undertake statistical analysis on the investments and returns on investments

with respect to pension funds in its custody and provided at a and information
to the Pension Fund Administrator and the Commission;

(g) Execute in favour of the Pension Fund Administrator relevant proxy for the
purpose of voting in relation to the investments; and

(h) Carry out other functions as may be prescribed by regulations and guidelines
issued by the Commission, from time to time.

6.8.4 Specific obligation of the Pension Fund Custodian

The Pension Fund Custodian shall:
(a) Maintain all pension funds and assets in its custody to the exclusive order of
the relevant Pension Fund Administrator and the Commission;

(b) Utilise any pension fund or assets in its custody to meet its own financial
obligation to any person whatsoever; and

(c) Not divert or convert pension funds and assets as well as any income or
brokerage, commission arising from the investment of pension fund or asset
or by any other means.

6.9 Refusal and revocation of licence of Pension Fund Administrators and

Custodians
The Commission may refuse to issue a licence to any applicant where it is satisfied
that:
(a) The information contained in the application for grant of licence is false or
untrue in any material particular;

(b) The application does not meet the requirements prescribed by this Act or the
Commission for grant of license; or

(c) The licence of the applicant had earlier been revoked by the Commission
under any of the conditions mentioned in Section 64 of this Act.

Where the Commission refuses to register any Pension Fund Administrator or

Pension Fund Custodian, it shall notify the applicant in the prescribed form, specifying
the reasons for such refusal.

The Commission may revoke a licence issued to a Pension Fund Administrator or

Pension Fund Custodian, where it discovers that:
(a) A statement was made in connection with the application, which the applicant
knew or ought to have known to be false, untrue or misleading in any material
particular;
© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 214
 Chapter 6: Pensions and gratuity
(b) The applicant or licensee is subject to an insolvency proceeding or is likely to
be wound up or otherwise dissolved;
(c) The conduct of affairs of the Pension Fund Administrator or Pension Fund
Custodian does not conform to the provisions of this Act or any regulations
made pursuant to this Act;

(d) Any event occurs which renders the Pension Fund Administrator or Pension
Fund Custodian unable to manage the pension funds or take custody of the
pension funds as the case may be; or

(e) The Pension Fund Administratoror Pension Fund Custodian is in breach of

any condition attached to the licence issued by the Commission.

The Commission shall, before revoking any licence, give:

(a) The Pension Fund Administrator or Pension Fund Custodian at least seven
calendar days notice of its intention and shall consider any representations
made to it in writing by the Pension Fund Administrator or Pension Fund
Custodian within that period before there vocation;

(b) The notice of there vocation shall be in the prescribed form and shall specify
the reasons for the-revocation of licence;

(c) The revocation of licence of a Pension Fund Administrator or Pension Fund

Custodian shall not in any way prejudice the entitlements of any beneficiary of
the retirement savings account under the Scheme and other approved
schemes;
(d) Notwithstanding the provisions of the Companies and Allied Matters Act, the
Commission shall in its revocation order, withdraw the powers of the board of
the Pension Fund Administrator or Pension Fund Custodian over the pension
funds and assets held or administered by the company and may appoint
administrators with relevant qualifications who shall superintend the transfer of
the assets and funds held or administered by the Company and exercise the
powers of the board where necessary in accordance with this Act;
(e) Cause the Retirement Savings Accounts being managed by the Pension Fund
Administrator whose licence was revoked to be transferred to another Pension
Fund Administrator or administrators as the case may be;

(f) Transfer the pension fund and assets being held by a Pension Fund
Custodian whose licence were revoked to another Pension Fund Custodian;
and
(g) The Commission shall publish by notice in the Federal Gazette, the list of the
Pension Fund Administrators or Pension Fund Custodians whose licenses
have been revoked.
(i) General obligations of the Pension Fund Administrator and Pension
Fund Custodian
he Pension Fund Administrator and Pension Fund Custodian shall:
(ii) Ensure that the pension fund is at all times managed or held in accordance
© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 215
 Chapter 6: Pensions and gratuity
with the provisions of this Act regulations or guidelines made hereunder and
any directive given by the Commission;

(iii) Take reason able care to ensure that the management or custody of the
pension funds is carried out in the best interests of the retirement savings
account holders;
(iv) Report to the Commission,as soon as practice able,any unusual occurrence
with respect to the pension funds which in his view could adversely affect the
rights of the owner of a retirement savings account under the Scheme;

(v) Report to the Commission, as soon as reasonably practicable, if an employer

is in default of remittance of any contribution and such remittance remains due
for a period of more than 14 days;

(vi) Subject to the guidelines issued by the Commission and upon the request of
an employee, transfer the retirement savings account promptly to another
Pension Fund Administrator; and
(vii) Provide annual fidelity insurance cover for its staff to the full value of the
pension funds and assets managed or held as may be determined by the
Commission.

(viii) Render to the Commission reports of any fraud, forgery or theft, which occurs
in its organisation in a format approved by the Commission.
(ix) Employ any person whose name is on the list maintained by the Commission
under section 74 (2) of this Act, unless with the prior approval of the
Commission
(x) Except with the prior consent of the Commission in writing, no Pension Fund
Administrator or Pension Fund Custodian shall enter into any agreement or
arrangement for the:
(a) Sale or transfer of significant shareholding of the Pension Fund
Administrator or Pension Fund Custodian which is capable of causing
a change in the shareholding structure of the Pension Fund
Administrator or Pension Fund Custodian;
(b) Restructuring of its share capital;
(c) Amalgamation or merger of the Pension Fund Administrator or
Pension Fund Custodian with any other Pension Fund Administrator
or Pension Fund Custodian;
(d) Restructuring of the Pension Fund Administrator or Pension Fund
Custodian; or
(e) Employment of a management agent or transfer its business to any agent

A Pension Fund Administrator or Pension Fund Custodian who fails to comply with
any of the above provisions (Sections 73, 74 and 75 of this Act) shall pay a penalty of
N1,000,000 to the Commission for every violation.The Commission may also impose
additional penalties including removal of any top management staff of the Pension
Fund Administrator or the Pension Fund Custodian who had knowledge or ought to
© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 216
 Chapter 6: Pensions and gratuity
have knowledge of the offences.

6.9.2 Appointment of chief executive officers for Pension Fund Administrators

and Pension Fund Custodians
The Chief Executive Officer, Directors and Management Staff of a Pension Fund
Administrator or Pension Fund Custodian shall:
(a) Not be appointed without the prior written approval of the Commission.
(b) Execute the code of conduct form as may be provided by the Commission
from time to time.
(c) Notwithstanding subsections (a) and (b) above, the Commission may suspend
or direct the resignation and/or sack of any Chief Executive Officer Director
or Management staff of any Pension Fund Administrator or Pension Fund
Custodian found to have grossly disregarded the provisions of this Act.
6.9.3 Appointment of compliance officer
Every Pension Fund Administrator and Pension Fund Custodian shall employ a
compliance officer who shall:
(a) Be responsible for ensuring compliance with the provisions of this Act rules
and regulations made there under and the internal rules and regulations made
by the Pension Fund Administrator or the Pension Fund Custodian;

(b) Have relevant professional and cognate experience;

(c) Report to the chief executive officer of the Pension Fund Administrator or the
Pension Fund Custodian and the Commission on any non – compliance bythe
Pension Fund Administrator or Pension Fund Custodian; and
(d) Liaise with the Commission with regard to any matter which, in the opinion of
the Commission, will enhance the compliance of the Pension Fund
Administrator and Pension Fund Custodian with the provisions of this Act and
guidelines issued thereunder.

6.9.4 Statutory Reserve Fund

Every Pension Fund Administrator shall maintain a Statutory Reserve Fund as
contingency fund to meet any claim for which the Pension Fund Administrator may be
liable as may be determined by the Commission. The Statutory Reserve Fund shall
be credited annually with 12.5 percent of the net profit after tax or such other
percentage of the net profit as the Commission may, from time to time, stipulate.
The Commission shall also establish and maintain a fund to be known as the Pension
Protection Fund for the benefits of eligible pensioners covered by any pension
scheme established, approved or recognized under this Act.

6.9.5Pension Protection Fund: The Pension Protection Fund shall consist of-
(a) An annual subvention of 1% of the total monthly wage bill pay able to
employees in the Public Service of the Federation towards the funding of the
minimum guaranteed pension;
(b) Annual pension protection levy paid by the Commission and all licensed
pension operators at a rate to be determined by the Commission, from time to
© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 217
 Chapter 6: Pensions and gratuity
time; and

(c) Income from investment of the Pension Protection Fund.

The Commission shall utilise the Pension Protection Fund for:
(a) The funding of the minimum guaranteed pension pursuant to section 84 of this
Act;
(b) The payment of compensation to eligible pensioners for shortfall or financial
losses arising from investment activities; and
(c) Any other purpose deserving protection with the Pension Protection Fund as
the Commission may, from time to time, determine.

The Commission shall make regulations governing the operations of the Pension
Protection Fund, fund management and custody, eligibility criteria and related
matters.
6.9.6Pension Fund administrative expenses
(a) All income earned from investment of pension funds under this Act shall be
credited to the individual Retirement Saving Accounts of beneficiaries.
(b) All fees, charges, costs and expenses on transactions made and properly
delineated by the Pension Fund Administrators shall be debited from the
pension fund, in line with regulations issued by the Commission, from time to
time.
(c) The Commission shall ensure that all information in brochures,
advertisements, promotional materials and claims of Pension Fund
Administrators are truthful in every way without omission of any fact which
may make the information contained therein misleading, false or deceptive.

6.10 Minimum pension guarantee

(a) All Retirement Savings Account holders who have contributed to a licensed
Pension Fund Administrator for a number of years to be specified by the
Commission shall be entitled to a guaranteed minimum pension as may be
specified from time to time by the Commission.

(b) The Nigeria Social Insurance Trust Fund shall continue to provide every
eligible citizen of Nigeria and legal resident social security insurance services
other than pension in accordance with the Nigeria Social Insurance Trust
Fund Act.

(c) The Nigeria Social Insurance Trust Fund Act shall be deemed amended in all
particulars to bring it in full compliance with this Act.

6.11 Investment of pension funds and restricted investments

6.11.1 Investment of pension funds
All contributions are to be invested by the PFA with the objectives of safety and
maintenance of fair returns on amount invested. Pension funds and assets shall only
be invested in accordance with regulations and guidelines issued by the Commission,
© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 218
 Chapter 6: Pensions and gratuity
from time to time.
Pension funds and assets shall be invested in any of the following:
(a) Bonds, bills and other securities issued or guaranteed by the Federal
Government and the Central Bank of Nigeria;
(b) Bonds, bills and other securities issued by the States and Local Governments;
(c) Bonds, debentures, redeemable preference shares and other debt
instruments issued by corporate entities and listed on a Stock Exchange
registered under the Investments and Securities Act;
(d) Ordinary shares of public limited companies listed on a securities exchange
registered under the Investments and Securities Act;
(e) Bank deposits and bank securities;
(f) Investment certificates of closed-end investment fund or hybrid investment
funds listed on a securities exchange registered under the Investments and
Securities Act with good track records of earning;
(g) Units sold by open-end investment funds or specialist open-end investment
funds registered under the Investments and Securities Act;
(h) Real estate development investments; or
(i) Specialist investment funds and such other financial instruments as the
Commission may approve from time to time.
6.11.2 Restricted investments
a. A Pension Fund Administrator shall not invest pension fund or assets in
shares or Restricted investment other securities issued by the Pension Fund
Administrator or its Pension Fund Custodian; and a shareholder of the
Pension Fund Administrator or its Pension Fund Custodian.

b. A Pension Fund Administrator shall not sell:

(i) Pension fund assets to itself,any shareholder, director, affiliate,
subsidiary, associate, related party or company of the Pension Fund
Administrator, any employee of the Pension Fund Administrator,
affiliates of any shareholder of the Pension Fund Administrator, or the
Pension Fund Custodian hold ing pension fund assets to the order of
the Pension Fund Administrator and any related party to the Pension
Fund Custodian;
(ii) Utilise pension fund to purchase assets from the persons mentioned in
subsection (a) of this section; and
(ii) Apply pension fund assets under its management by way of loans
and credits or as collateral for any loan taken by a holder of retirement
savings account or any person whatsoever.

6.11.3 Supervision and examination of Pension Fund Administrators and

Pension Fund Custodians on investments

Any Pension Fund Administrator who fails to comply with any provision of this Act
shall be liable to a penalty of not be less than N500,000 for each day that the non-
compliance continues and the Pension Fund Administrator shall forfeit the profit from
that investment to the beneficiaries of the Retirement Savings Accounts and where
© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 219
 Chapter 6: Pensions and gratuity
the investment has led to a loss, the Pension Fund Administrator shall be made to
make up for the loss.

6.12 Offences, penalties and enforcement powers

6.12.1 Offences and penalties
(a) A person who contravenes any of the provisions of this Act commits an
offence and where no penalty is prescribed, shall be liable on conviction to a
fine of not less than N250,000 or to a term of not less than one year
imprisonment or to both fine and imprisonment.
(b) Any person or body who attempts to commit any offence specified in this Act
commits an offence and is liable, on conviction, to the same punishment as is
prescribed for the full offence in the Act. Offences and penalties.
(c) Without prejudice to Section 174 of the Constitution of the Federal Republic
of Nigeria 1999 (as amended), the Commission may compound any offence
provided for under this Act by accepting an amount less than the fine provided
for the offence under this Act.
(d) A Pension Fund Administrator, Pension Fund Custodian that reimburses or
pays for a staff, officer or director directly or indirectly a fine imposed under
this Act commits an offence and is liable on conviction to a fine of not less
than N5,000,000 and also forfeits the amount repaid or reimbursed to the
staff, officer or director.

6.12.2 Penalties for misappropriation of pension fund

(a) Prison term of 10 years plus fine of 3 times the amount misappropriated.
(b) Forfeiture of the entire asset and properties or fund with accrued interest or
the proceeds of any unlawful activity under the Act in his / her possession.
(c) The Act also criminalises any re-imbursement or payment by a PFA or by
Pension Fund Custodian (PFC), to a staff, officer or director upon whom a fine
has been imposed (the minimum fine being N5m).
(d) For Pension Fund Custodian (PFC),the minimum fine is N10m (upon
conviction) where the PFC fails to hold the funds to the exclusive preserve of
the Pension Fund Administrative and National Pension Commission
PENCOM, or where if applied the funds to meet its own financial obligations
(in the case of Direct - N5m or 5 years imprisonment or both).
(e) A Pension Fund Administrator, Pension Fund Custodian, any person or body
who refuses to produce any book, account, document or voucher; give any
information or explanation required by an examiner; or with intend to defraud,
produces any book, account, document or voucher, orgives any information or
explanation, which is false or misleading in any material particular; or supplies
information which he knows to be false or supplies the information recklessly
as to its truth or falsity, commits an offence under this Act and shall
onconviction be liable to a fine not Jess than N200,000 or to imprisonment for
a term of not less than three years or to both such fine and imprisonment for
every false or misleading information given and where the offence continues
© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 220
 Chapter 6: Pensions and gratuity
to a fine not less than N100,000 for every day the offence continues,
(f) Where an offence under this Act is committed by a body corporate, the body
corporate or every-
(i) Director, manager, secretary or other officers of the body corporate;
(ii) Person who was purporting to act in such capacity mentioned in paragraph
(a) of this section, who had knowledge or believed to have had
knowledge of the commission of the offence and who did not exercise
due diligence to ensure compliance with this Act shall be deemed
to have committed the offence and shall be proceeded against in
accordance with this Act.
(iii) Notwithstanding the provisions of any other law, the Commission may,
in addition to the penalties stipulated under this Act, impose additional
sanctions on the board, any director, management, manager or officer
of a Pension Fund Administrator or Pension Fund Custodian that
violates any of the provisions of this Act.

6.13 Deficiencies of Pension Reform Act, 2014

(i) Scope and coverage: The Scheme applies to employees in both the public
and private sectors. Mandatory contribution is applicable to organisations in
which there are 15 or more employees (previously 5 employees).This
effectively reduces the number of employer sand employees that are likely to
benefit from the scheme. Given the low level of contributors under the
Scheme, this change is counter-productive.

(ii) Basis of contribution: Contributions are now to be based on ‘monthly

emoluments’ being the total emolument as defined in the employee’s contract
of employment provided it is not less than the total of the employee’s basic
salary, housing and transport allowance. This definition is vague and could be
interpreted to mean that all items that are paid on a monthly basis (in addition
to basic, housing and transport) would form part of the base on which the
pension rates are applied. This potentially larger base could well mean that
many employers will see an increase of over 100% in their pension
contribution obligations while employees’ net pay will reduce unless their
employers chose to increase their salaries to accommodate the additional
contribution.

(ii) Rates of contribution: The rates of contributions to be made under the new
Scheme by both the employer and employee are a minimum of 10% and 8%
respectively (7.5% of the employee’s monthly basic, housing and transport
allowances by both parties under the repealed Act). Again, this will increase
the cost of employment and may force many employers to take drastic
measures such as rationalisation of staff strength.

(iv) Commencement date: The Pension Reform Act 2014 (Act) was signed into
law by the President on 1 July 2014 with the same date as commencement
date, does not give room for transition arrangement and proper planning by
© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 221
 Chapter 6: Pensions and gratuity
affected employers.

(v) Gaps in coverage: Only employers with a minimum of 15 employees are

required to contribute to the new Scheme. The Act provides that in the case of
private organisations with less than 3 employees participation in the Scheme
would be governed by guidelines issued by the National Pension Commission
(PenCom). However, the Act is silent on the applicability of the Scheme to
private organisations with more than 3 but less than 15 employees. Also what
happens to employers with 5 to 14 employees regarding their past
contributions under the old Act?

(vi) Sole contribution by employers: The Act provides that an employer can
take full responsibility of the contribution but in that case, the contribution shall
not be less than 20% of the employee’s monthly emolument.This provision
contradicts the combined contribution by both parties of 18%. Employers will
therefore be discouraged from taking full responsibility.

6.14 Pension Transitional Arrangements Directorate (PTAD)

Pension Transitional Arrangement Directorate (PTAD) is responsible for the pension
administration of the Defined Benefit Scheme (DBS). PTAD was established to
address the numerous pensioners’ complaints that borderon issues such as non-
payment of monthly pension, short payment of pension and gratuity, removal of name
on pension payment voucher, non-payment of harmonised pension arrears, irregular
payment of federal pensions and non receipt of pension after retirement, etc.
Empowered by Section 30, Sub-section (2a) of the Amended Pension Reform Act,
2004, and it will take over the management of three of the offices presently running
the old pension scheme. These are the Civil Service Pension Department, the Police
Pension Office and the Customs, Immigration and Prisons Pension Office (CIPPO).

Sections 42 and 44 of Pension Reform Act 2014 established Pension Transitional

Arrangements Directorate for public service of the Federation and Pension
Transitional Arrangements Directorate for the Federal Capital Territory respectively.

6.14.1 Functions of PensionTransitional Arrangements Directorate for

public service of the Federation and Federal Capital Territory

(a) Implementation of policies, rules and regulations relating to pension matters

under the Defined Benefit Scheme (DBS).
(b) Ensure accurate payments are made to authentic Pensioners under the Civil
Service jurisdiction.
(c) Facilitate the maintenance of an accurate and comprehensive database of
pensioners under its jurisdiction.
(d) Management and maintenance of pensioners’ records and files.
(e) Prepare budgetary estimates for existing pensioners as well as outstanding
liabilities and benefits of pensioners with genuine complaints.
(f) Prepare and submit the Monthly Payroll of Civil Service Pensioners and issue
payment instructions to the Office of the Accountant General of the
© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 222
 Chapter 6: Pensions and gratuity
Federation, OAGF through the GIFMIS platform for direct payment to
pensioners.
(g) Respond to pensioners’ complaints, relating but not limited to, non-/under-/
over-payment of pensions, gratuities, death benefits, etc.
(h) Carry out monthly payment analysis and payroll review and ascertain deficits
in pension payments.
(i) Prepayment audit of all payment vouchers.
(j) Compliance audit to ensure government financial rules and regulations are
complied with in all financial transactions.
(k) Review of Financial Statements –Transcripts, bank reconciliations,
pensioners’ statement of claims, etc.
(l) Safeguarding the assets of the department.
(m) Periodic examination of systems and processes, certification of payment
vouchers and other accounting books and records by use of Internal Audit
Stamp.
(n) Production of monthly audit reports.
(o) Collaborate with Pension Support and ensure periodic verification of civil
service pensioners.

6.14.2 Powers of the Commission over Pension Transitional Arrangements

Directorate for public service of the Federation and Federal Capital Territory

The Commission shall have power to:

(a) Regulate and supervise the activities of the Federal Government Pension
Transitional Arrangements Directorate and the Federal Capital Territory
Pension Transitional Arrangements Directorate to ensure compliance with the
provisions of this Act;

(b) Intervene to administer and render technical support and advice on the
management of the various Pension Transition Administration Directorates as
per the directive of the President of the Federal Republic; and

(c) Ensure that the Federal Government Pension Transitional Arrangements

Directorate and the Federal Capital Territory Pension Transitional
Arrangements Directorate operate under the rules, regulations and directives
issued by the Commission from time to time.

6.15 Pension provisions for private sector

Any pension scheme in the private sector existing before the commencement of this
Act may continue to exist provided that:
(a) The pension scheme shall be fully funded and in case of any defined
contribution scheme, contributions in favour of each employee including the
attributable income shall be computed and credited to a retirement savings
account opened for the employee;
(b) The pension funds and assets shall be fully segregated from the funds and
assets of the company;

© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 223
 Chapter 6: Pensions and gratuity
(c) The pension funds and assets shall be held by a custodian;
(d) Every employee in the existing scheme shall be free to exercise the option
of coming under the Scheme established under section 3 of this Act and
his employer shall compute and credit to his account, his contributions and
distributable income earned as at the date the employee exercises such an
option subject to the regulations, rules and standards established by the
Commission;
(e) Any amount computed under paragraph (d) of this sub-section shall be
transferred to the retirement savings account of the employee maintained with
a pension fund administrator of his choice;
(f) All investments in assets other than those specified as permissible investment
for pension funds and assets under section 86 of this Act may be maintained
and from the commencement of this Act all investments shall be subject to the
regulation, rules and standards established by the Commission;
(g) The employer shall undertake to the Commission that the pension fund shall
be fully funded at all times and any short fall to be made up within 90 days or
as may be prescribed by the Commission; and
(h) The existing scheme shall be closed to new employees and such new
employees shall be required to open a retirement savings account.

An employer operating any defined benefits scheme shall undertake, at the end of
every financial year, an actuarial valuation to determine the adequacy of his pension
fund assets.

6.15.1 Closed Pension Fund Administrator

Subject to the provisions of this Act and any regulation issued by the Commission,
Closed Pension Fund Administrators licensed by the Commission before the
commencement of this Act may continue to exist provided that new employees of
sponsor companies shall join the Contributory Pension Scheme and open Retirement
Savings Account.

Every closed pension fund administrator shall be:

(i) Subject to supervision and regulation by the Commission; and
(ii) Deemed to be pension fund administrator, and all provisions in this Act
relating to the conduct and operations of a pension fund administrator shall
apply to it.

6.15.2 Funds with Nigeria Social Insurance Trust Fund

(a) The Nigeria Social Insurance Trust Fund shall continue to maintain the
company it established under the Pension Reform Act, 2004 to undertake the
business of a Pension Fund Administrator in accordance with this Act.

(b) The funds contributed to the Nigeria Social Insurance Trust Fund by any
person before the registration of a pension fund administrator under this Act
including any attributable income thereof not required for the purpose of
administering minimum pension as determined by the Commission shall be
© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 224
 Chapter 6: Pensions and gratuity
computed and credited into the respective retirement savings accounts
opened under this Act by each contributor or beneficiary of the contributions
made under the Nigeria Social Insurance Trust Fund Act.

(c) Where a person who contributed any fund under the Nigeria Social Insurance
TrustFundActhasretiredbeforethecommencementofthisAct, the funds due to
him shall be paid to him in accordance with section 7 of this Act or in lump
sum in accordance with the rules and regulations of the Commission.

(d) Where a person who contributed any fund under the Nigeria Social Insurance
Trust Fund has died before the commencement of this Act, the estate or
beneficiary of the deceased shall be paid the entitlement of such deceased
person subject to the provisions of the Nigeria Social Insurance Trust Fund
Act.

(e) All pension funds and assets held and managed by the Nigeria Social
Insurance Trust Fund shall, pursuant to rules made by the Commission, be
transferred to a Pension Fund Custodian or Administrator.

6.16 Micro pension plan

Section 2(3) of the Pension Reform Act, 2014 (PRA 2014) provides that employees
of organisations with less than three employees as well as the self-employed persons
shall be entitled to participate in the Contributory Pension Scheme in accordance with
guidelines issued by the Commission. In accordance with the provisions of section
2(3), a “Micro Pension Plan” which refers to an arrangement for the provision of
pensions to the self- employed and persons operating in the informal sector.

6.16.1 Definition of terms

(a) Informal sector - the informal sector refers to employees in business entities,
organisations and/or persons that are not mandated to implement the
Contributory Pension Scheme as provided in Section 2(1) of the Pension
Reform Act, 2014

(b) Self-employed - A self-employed individual earns his/her income through

conducting trade or business for him/herself

(c) Micro pension contributor (MPC) - A person who is registered under Micro
pension plan.

(d) Micro pension fund (MPF)-This is a pool of contributions and all other assets
under Micro pension plan.

(e) Named beneficiary - An individual or any person who is legally entitled to

receive or enjoy any benefit accruable to a deceased/missing Micro Pension
Contributor.
(f) Automated finger print identification system (AFIS)-A biometric
identification (ID) methodology that uses digital imaging technology to obtain,
store and analyse finger prints data
© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 225
 Chapter 6: Pensions and gratuity

(g) Personal Identification Number (PIN) - Personal identification number is a

number issued to an individual upon opening a Retirement Savings Account.

6.16.2 Objectives of the guidelines

These guidelines are set out to achieve the following objectives:
(i) Set eligibility criteria for participation in Micro pension plan;
(ii) Establish the process of registration for prospective micro pension contributors;
(iii) Define the process of making contributions by micro pension contributors;
(iv) Provide the criteria for managing the micro pension fund;
(v) Outline the modes of accessing benefits under micro pension plan;
(vi) Define the mode of conversion from micro pension plan to mandatory
contribution; and
(vii) Set the minimum ICT requirements for licensed pension fund administrators
and custodians.
6.16.3 Micro pension contributor
The micro pension contributor shall:
(i) Open a Retirement Savings Account (RSA)with any Pension Fund
Administrator (PFA) of his/her choice;
(ii) Make contributions into his/her RSA in accordance with these guidelines;
(ii) Request for RSA statement from his/her PFA;
(iv) Update his/her RSA information non request;
(v) Appoint a next of kin;
(vi) Choose the platform for making contributions;
(vii) Decide to make contingent withdrawals;
(vii) Choose the mode of accessing pension (programmed withdrawal or annuity)
from micro pension plan; and
(ix) Demand for adequate customer service as provided in the consumer
protection framework issued by the Commission.
6.16.4 Pension Fund Administrators (PFAs)
(i) Open RSA for the micro pension contributor.
(ii) Manage micro pension funds and assets in line with the regulation on
investment of pension fund assets issued by the commission.
(iii) Provide customer service support to micro pension contributors.
(iv) Process, approve and pay contingent benefits to micro pension contributors.
(v) Process and pay retirement benefits to micro pension contributors.
(vi) Provide secure and suitable platforms for the remittance of contributions and
payments of benefits under micro pension plan.
(vii) Request the commission to approve other incentives for micro pension plan.
(viii) Render daily and monthly returns on the micro pension fund and other
periodic returns as may be required by the commission from time totime.
(ix) Conduct regular public awareness, enlightenment and education on micro
pension plan.
(x) Issue quarterly RSA statements to the micro pension contributor.

© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 226
 Chapter 6: Pensions and gratuity
(xi) Carry-out other functions on Micro Pension Plan as may be specified by the
Commission from time to time.

6.16.5 Pension Fund Custodians (PFCs)

The PFCs shall:
(i) Receive all pension contributions remitted under micro pension plan from the
contributor on behalf of the PFA.
(ii) Hold micro pension funds and assets in safe custody on trust for the micro
pension contributors and the beneficiaries of the RSAs.
(ii) Settle all transactions relating to the administration and investment of micro
pension funds and assets on behalf of the PFA.
(iv) Render returns to the commission on matters relating to micro pension plan
assets being held by it on behalf of any PFA at such intervals as may be
determined from time to time by the Commission.
(v) Provide secure and suitable platforms for the remittance of contributions and
payments of benefits under micro pension plan.
(vi) Carryout other functions on micro pension plan as may be directed by the
commission from time to time

6.16.6 Operational modalities for micro pension plan

The following persons not below 18years of age with source of income shall be
eligible for participation in micro pension plan under Section 2(3) of the Pension
Reform Act. 2014:
(a) Self-employed persons that belong to a trade, profession, cooperative or
business association.
(b) Self-employed persons with a business registration as a company, partnership
orenterprise.
(c) Employees operating in the informal sector who work with or without formal
written employment contract.
(d) Other self-employed individuals.
(e) Micro Pension Contributors shall be resident in Nigeria.

6.16.7 Registration
(a) A prospective micropension contributor shall be required to open a Retirement
Savings Account (RSA) by completing a registration form with a PFA of his/her
choice.
(b) The PFA will assign the appropriate nature of business (NOB) codes for the
prospective micro pension contributor as provided by the Commission.
(c) Electronic registration should be made available by all PFAs.
(d) PFAs shall electronically capture the applicant’s ten fingerprints and must pass
the AFIS quality requirements specified in the guidelines for the registration of
contributors/members issued by the commission.
(e) Where the quality of the ten finger prints does not meet the required AFIS
specification due to physical impairment, the PFA shall treat such prospective
micro pension contributor as physically/partially challenged and shall register
© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 227
 Chapter 6: Pensions and gratuity
such in line with the guidelines for registration of contributors/members issued
by the Commission.
(f) The registration information shall be transmitted to the Commission
electronically by the PFA to enable PIN generation.
(g) The PIN generated by the Commission shall be forwarded to the PFA
immediately.
(h) The PFA shall forward the PIN to the micro pension contributor.
(i) Registration shall also cover the “Customer Familiarity Index” (CFI) on Micro
Pension Contributor.
(j) Any of the following valid means of identification shall be provided at the point
of registration:
(i) National identification number
(ii) Permanent voters card
(iii) Driver’s license
(iv) International passport
(k) Any of the following documentation shall be provided at the point of
registration:
(i) Evidence of membership of a registered association, union or
cooperative society
(ii) Certificate of business registration
(iii) Certificate of incorporation
(iv) Letter of employment
(v) Bank Verification Number (BVN)
(l) Other documentation as may be specified by the PFA.
(m) A Micro Pension Contributor may transfer his/her Retirement Savings Account
from one PFA to another in line with the Regulations for the Transfer of RSA
issued by the Commission.
6.16.8 Contributions
(a) Contributions shall be made in Nigerian currency (Naira).
(b) Micro pension contributors may make contributions daily, weekly, monthly or
as may be convenient to them provided that contributions will be made in any
given year.
(c) Every contribution shall be split into two comprising 40% for contingent
withdrawal and 60% for retirement benefits.
(d) The amount of contribution shall be dependent on the micropension
contributor’s pension aspiration and financial capacity.
(e) Both PFAs and PFCs are required to inform the Economic and Financial
Crime Commission of any single lodgment of N5 Million and above.
(f) Contributions shall be made by cash deposit, electronically, through any
payment instrument/platform or other financial service agents approved by the
Central Bank of Nigeria.
(g) The PFC shall immediately advise the PFA upon receipt of value of contributions.
(h) Upon receipt of notification from the PFC, the PFA shall immediately notify the
micro pension contributor.
© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 228
 Chapter 6: Pensions and gratuity
(i) PFAs shall charge a maximum administration fees of eighty naira (N80) for
contributions of Four Thousand Naira (N4,000.00) and above while a
maximum administration fees of twenty naira (N20) shall be charged on RSAs
for contributions below the sum of four thousand naira (N4,000.00).
(j) There shall be no additional charges/costs other than what is specified in
these guidelines.
(k) The narration of the standing order shall include the contributor’s PIN.
(l) In all cases the narration of the transfer shall include the contributor’s PIN.
(m) Contributions received from political office holders and those on tenured
employments other than thos on contract appointments shall be treated in line
with the Guidelines on Voluntary Contributions issued by the Commission.

6.16.9 Investment of micro pension fund /assets

(i) Contributions under micro pension plan shall be managed as one fund known
as the Micro Pension Fund (MPF).
(ii) The investment of the fund shall be treated in line with the regulation on
investment of pension fund assets issued by thecommission.
(iii) Management fees shall be in accordance with the Regulation on Fees
Structure issued by the Commission.
6.16.10 Benefits administration
The participation of the informal sector in the contributory pension scheme as
provided by Section 2(3) of the PRA 2014 is primarily to provide for retirement
benefits. Withdrawals/accessing benefits shall be two types reflecting the flexibility
incorporated in the treatment of the contributions.
6.16.11 Contingent withdrawal
(i) The micro pension contributor shall be eligible to access the portion of his/ her
contribution available for withdrawal 3 months after making the initial
contribution.
(ii) Subsequently, the micro pension contributor can only make withdrawals once
in a week from the balance of the contingent portion of the RSA.
(ii) The micro pension contributor may withdraw the total balance of the
contingent portion of his/her RSA including all accrued investment income
theresto.
(iv) The micro pension contributor may choose to convert the contingent portion of
the contributions to the retirement benefits portion at the end of everyyear.
(v) The time frame for processing and payment of contingent withdrawals shall
not exceed two working days.
(vi) Payment shall be made only to the Micro Pension Contributor’s designated
bank account.
(vii) The PFA shall approve and pay all requests for contingent withdrawals.
(vii) The PFA shall notify the Commission of all payments made monthly.
(ix) Contingent withdrawals shall be subject to applicable tax laws in accordance
© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 229
 Chapter 6: Pensions and gratuity
with the provisions of Section 10(4) of the PRA 2014.
(x) A tretirement, the Micro Pension Contributor has the option of transferring
part/all of his outstanding balance on the contingent portion to his retirement
benefits portion.
6.16.12 Retirement benefits withdrawal
(i) The micro pension contributor shall be eligible to access pensions upon
retirement and attaining the age of 50 years or on health grounds in
accordance with the regulation for the administration of retirement and
terminal benefits.
(ii) The micro pension contributor shall be required to fill a standard retirement
notification format retirement.
(ii) The PFA shall inform micro pension retiree on the various options of
accessing retirement benefits.
(iv) The micro pension retiree shall decide on the mode of accessing retirement
benefits either through the programmed withdrawal or the life annuity.
(v) The commission shall approve all programmed withdrawals, life annuity and
exit payouts under micro pension plan.
(vi) In the case of programmed withdrawal, the PFA and the retiree shall jointly
execute a programmed withdrawal agreement, stating the terms and
conditions of the contract.
(vii) In the case of the life annuity, the insurance company and the retiree shall
jointly execute the annuity contract, stating the terms and conditions of the
contract.
(viii) All payments for contingent and payments of pensions shall be made only to
the contributor’s/retiree’s designated bank account through channels
approved by the CBN.
(ix) Micro pension contributors shall be entitled to guaranteed minimum pension
provided they satisfy the provision of Section 84(1) of the PRA 2014 and the
Guidelines on Minimum Pension Guarantee issued by the Commission.
(x) Where the total amount contributed is below the amount required
‘to qualify for Minimum Pension Guarantee, the Micro Pension retiree shall
be paid en bloc in accordance with the Regulation for the Administration of
Retirement and Terminal Benefits.
(xi) Any contribution after retirement shall be treated as Voluntary Contributions
(VC).

6.16.13 Deceased / missing persons

The processing of deceased/missing person’s benefits under micro pension plan shall
be in line with the regulations for the administration of retirement and terminal benefits
issued by the commission.

6.16.14 Conversion from micro pension plan to mandatory contribution

(a) The micro pension contributor shall be eligible to participate under Section
2(1) of the Pension Reform Act, 2014 where he/she secures employment in
© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 230
 Chapter 6: Pensions and gratuity
the formal sector with an organisation that has three (3) or more employees.
(b) The micro pension contributor shall formally request for conversion, attaching
all necessary documents specified in the guidelines for the registration of
contributors/members issued by the commission.
(c) The micro pension contributor shall retain his/her existing RSA.
(d) Micro pension contributor may withdraw the total balance of the contingent
portion of his/her RSA prior to conversion.
(e) Where the Micro pension contributor chooses not to withdraw the contingent
portion, the balance of his/her contingent portion shall be merged with the
retirement benefits portion of his/her RSA prior to conversion.
(f) At conversion, the PFA shall move the micro pension contributor’s RSA
balance to the appropriate fund under the multi-fund structure.
(g) Where an eligible contributor fails/refuses to request for conversion to the
mandatory contribution after one (1) month of receiving remittance from
his/her new employer, the PFA shall automatically change the status of the
contributor upon receiving the second remittance.
(h) The PFA shall notify the employer of the status of the RSA of the contributor.
(i) The PFA shall forward monthly returns on conversion to the Commission.

6.16.15 Conversion from mandatory contribution to micro pension plan

Participants in mandatory contribution shall not be allowed to convert to micro pension
plan.

6.16.16 Returns
(a) PFAs/PFCs shall render regular returns through the Risk Management and
Analysis System (RMAS) and/or any other platform as specified by the
commission.
(b) PFAs/PFCs shall also render the daily and monthly returns for the micro
pension fund.
(c) PFAs/PFCs may be required to render other periodic returns.

6.16.17 Minimum requirements for participation by licensed pension

fund administrators and custodians
(i) PFAs/PFCs shall establish adequate structure for the effective and efficient
operation of micro pension plan.
(ii) The minimum ICT requirements shall be in-line with the ICT guidelines issued
by the Commission.
(iii) Licensed PFAs/PFCs shall provide multi-channel platforms for registration,
collection, and customer service and benefits administration.

6.17 Chapter review

The institutional and legal framework for pension administration was discussed in
details. Pension Reform Act 2014 treats extensively the management of pension
funds both in the public and private sectors. The Act established a uniform
management of pension funds for the two sectors.
© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 231
 Chapter 6: Pensions and gratuity

6.18 Worked examples

6.18.1 Examination type questions
1 (a) According to Pension Reform Act 2014, state the composition of the
National Pension Commission.
(b) Enumerate five (5) powers of the National Pension
Commission.
(c) State five (5) functions of the National Pension Commission.

2 Mr.James Ojo was employed as a clerk in the Federal Ministry of Housing on January
2, 1980. He proceeded on approved leave without pay to the United Kingdom to study
Building Technology on June 11th 1995 and returned to his duty post on May 29th
1997. There was a change in Pension Act providing for contributory Pension on July
1, 2004 and was promoted to Grade Level 17 officer with an annual remuneration of
₦5,500,000 on January 1, 2004. He retired from service on January 1,2015.
The total employer and employee contributions with his Pension Fund Administrator
(PFA) as the time of retirement was N12,950,850.00.
The total bond cash backed by Pension Commission between January 2,1980 to
June30, 2004 and paid to his PFA was N11,000,550.00 .According to the template
provided and approved by the Pension Commission ,the officer is entitled to 45% of
his benefits as lump sum payment.
You are required to calculate
a) The total retirement benefits of Mr Ojo.
b) The total lump sum payment due to him on retirement.
c) State the statutory age of retirement from civil service inNigeria
d) State the conditions under which an employee may make withdrawals from his
Retirement Savings Accounts where he is less than 50 years or retires from
service before attaining the age of 50 years.

3 (a) What are the pre-requisites for granting licence for an entity to be in operationas:
(i) Pension Fund Administrator; and
(ii) Pension Fund Custodian.

6.18.2 Suggested solutions to examination questions

1 (a) Composition of the Pension Fund Commission
The Composition of the Commission is as follows:
(i) Apart time Chairman with university degree or its equivalent
and with 20 years experience in pension matters and or
insurance;
(ii) Director General who shall be the CEO responsible for the day-
to-day administration of the commission, he must also possess
not less than 20 years experience in pension matters and or
insurance or related field;
(ii) Four full time commissioners with experience each in Finance
Investment;
© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 232
 Chapter 6: Pensions and gratuity
(iv) Accounting, Pension Management, Actuarial Science or
Business Administration; and
(v) Part – time members of the Commission who shall be
representatives each of:
□ The Head of the Civil Service of the Federation
□ The Federal Ministry of Finance
□ The Nigeria Labour Congress
□ The Nigeria Union of Pensioners
□ The Nigeria Employers Consultative Association
□ The Central Bank of Nigeria
□ The Securities and Exchange Commission.

(b) Powers of theCommission

(i) Power to fix the terms and conditions of service including
remuneration of employees of the Commission
(ii) Power to oversee the overall policy on pension matters in
Nigeria.
(iii) Power to charge and collect any fee, levy or penalty as
may be specified by the Commission.
(iv) Power to make request for information from any employer
or Pension Fund Administrator on retirement benefits
matters.
(v) Power to impose administrative sanctions or fines on any
erring employer or Pension Fund Administration.

(c) Functions of the Commission

(i) To supervise, regulate and coordinate the pension
scheme established by the Act.
(ii) To formulate and issue guidelines for the investment of
pension funds
(iii) To approve, license, regulate and supervise Pension
Fund Administrators
(iv) To ensure the maintenance of a National Data Bank on
all pension matters
(v) To carry out public awareness and education on the
establishment and management of pension schemes.
(vi) To receive and investigate complaints of impropriety
levelled against any pension fund administrator.

2. (a) Retirement benefits

N
Employer and employee contributions 12,950,850.00
Federal Government Bond 11,000,550.00
Total benefits 23,951,400.00

© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 233
 Chapter 6: Pensions and gratuity
(b) Lump sumpayment
45% of N23,951,400.00 = N10,778,130.00

(c) Statutory age of retirement

All officers shall retire on reaching the age of 60 years or having
served for 35 years in service, whichever comes earlier. But an officer
may be retired at anytime on reaching the minimum age of 50 years,
subject to 3 months’ notice in writing or 3 months’ salary in lieu of
notice being paid.

(d) (i) Where an Officer retires before attaining the age of 50 years, onthe
advice of suitably qualified physician or properly constituted
Medical Board, certifying that the employee is no longer mentally
and physically capable of carrying out the function of his office,
may withdraw; or if the officer is retired due to his total or
permanent disability either of mind or body.

(ii) Where the employee retires before the age of 50 years in

accordance with the terms and conditions of his employment, he
shall be entitled to make withdrawals.

3 (a) Pension Fund Administrator (PFA)

A Pension Fund Administrator must possess the following:
(i) A practising licence issued by National Pension Commission
(ii) Be a Limited Liability Company set up to manage pension fund
only
(iii) A minimum of N150m paid up capital
(iv) Professional capacity to manage funds and administer
retirement benefit.

(b) Pension Assets Custodian (PAC)

A Pension Asset Custodian must possess the following:-
(i) Issued licence to hold pension funds and assets intrust.
(ii) Minimum net worth of Five Billion Naira (5Bn)
(iii) A balance sheet position of N125m
(iv) Execute the orders of the PFA as regards holding pension
funds and assets.

© 2021 The Institute of Chartered Accountants of Nigeria All Rights Reserved 234