Retirement Savings Account FAQs
1. What is a Retirement Savings Account
A Retirement Savings Account is an account you open with a Pension Fund Administrator for your pension contributions under the Contributory Pension Scheme. Once you open a Retirement Savings Account you will be given a Retirement Savings Account Personal Identification Number usually called an RSA PIN. The RSA PIN comes with PEN and 12 numbers e.g PEN123456789012. An RSA PIN is unique to an RSA holder and are usually released serially. You are to only open one Retirement Savings Account, if you move from one company to another you are to give the same Retirement savings account to your new employer to enable them send your pension contributions to your Pension Fund Administrator (PFA).
2. Can I borrow from my Retirement Savings Account
NO. You can not borrow from your Retirement Savings Account or use your Retirement Savings account for collateral as loan.
A Retirement Savings Account is primarily meant for pension and to be accessed when you retire but there are instances where you can have access the funds in your Retirement Savings Account before your retire.
3. Can I have more than 1 (One) Retirement Savings Accounts
No, You are to only have ONE Retirement Savings Account, under no circumstance is a person allowed to have more than one Retirement Savings Account.
4. What will happen to my Retirement Savings Account if I change employer
If you move from one employer to another, all you need to do is to give your new employer your Retirement Savings Account number to enable the employer add your name to their pension schedule and you should also contact your Pension Fund Administrator and inform them that you have changed employer to enable them update their records.
5. How long does it take to withdraw from your Retirement Savings Account (RSA).
We have not seen a fixed time within which it’s 100% guaranteed that you will be able to withdraw from your RSA from any Pension Fund Administrator (PFA) in Nigeria. On average, we have seen people withdraw from their RSA within 2 weeks.
Listed below are the general stages that your application could go through, If you feel your request for withdrawal is taking too long, you should demand that your PFA informs you of the actual stage your application is.
The stages your application might go through;
- Client submits complete documentation
- Pension Fund Administrator (PFA) verifies your documents
- PFA confirms that your employer has remitted all your pension contributions
- PFA sends your request for withdrawal to PenCom for approval
- PenCom reviews the application and approves it
- PFA receives PenCom approval and sends to PFC
- PFC (PFA bank) processes the payment and credits your bank account
Pension Contribution FAQs
1. What percentage of my salary goes to Pension
According to the provisions of Pension Reform Act 2014, minimum of 8% of your monthly emolument goes to pension while your employer is also required to contribute minimum of 10% of your monthly emolument to your pension. I.e, if your total monthly emolument is N100,000 the pension that will be deducted from your monthly emolument will be N8000 while your employer will bring N10,000. Monthly emoluments means total emoluments as may be defined in the employee’s contract of employment but shall not be less than the total sum of basic salary, housing allowance and transport allowance.
2. How does my Pension Contribution gets into my RSA
Your employer is responsible for the deduction of your pension contribution from your salary before paying you, add their own portion and send it to the Pension Fund Custodian of your Pension Fund Administrator. Your Pension Fund Administrator will thereafter credit your Retirement Savings Account.
3. What can I do if my employer refuses to remit my pension contributions
If your employer is not remitting your pension contributions and or they don’t have group life insurance for their employees, please do not hesitate to report the employer to the National Pension Commission.
You can also report anonymously.
To report, you are advised to send a letter of complaint to PenCom stating the name and address of the employer and the months outstanding to enable PenCom send recovery agents to go after the employer.
You can drop the letter at or send the letter to any PenCom office closest to you.
List of all PenCom offices are available here www.pencom.gov.ng/contact-us/
Also below is a publication by PenCom on Notice to all Employees on their rights to Life Insurance Policy and Pension Contributions.
4. What is the punishment for an employer who fails to remit pension contribution
Pension Reform Act 2014 mandates that employers must remit pension contributions on behalf of their employees within 7 working days from the date of payment of salaries. Where the employer fails to either deduct or remit the contributions within the stipulated time, the employer will be liable to pay a penalty that is not less than 2% of the total outstanding pension contributions that remains unpaid for each month or part of each month the default continues.
It is the responsibility of the employee to report employers who have refused to remit pension contributions to National Pension Commission.
National Pension Commission as the regulator for the industry uses Recovery Agents to go after reported employers and ensure that they pay the outstanding pension contributions plus interest.
Check out all the FAQs we have compiled for the pension industry in Nigeria below;
PensionNigeria Frequently Asked Questions
FAQs on RSA Transfer Window
Retiree Pack – Guide for Retirees under Contributory Pension Scheme (CPS)
National Pension Commission General FAQs on Contributory Pension Scheme
Micro Pension Frequently Asked Questions (FAQ)
FREQUENTLY ASKED QUESTIONS ON THE MICRO PENSION PLAN (PIDGIN)
FREQUENTLY ASKED QUESTIONS ON THE MICRO PENSION PLAN (IGBO)
FREQUENTLY ASKED QUESTIONS ON THE MICRO PENSION PLAN (HAUSA)
FREQUENTLY ASKED QUESTIONS ON THE MICRO PENSION PLAN (YORUBA)
PTAD Frequently Asked Questions (FAQs)
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