Implementation of the pension reform act 2004 and enhancement of pensioners welfare 94 4. The pension reforms act, 2004 which introduced the defined contribution pension scheme with its regulatory and agency bodies such as the national pension commission pencom, pension fund. Text of the pensions act 2004 as in force today including any amendments within the united kingdom, from legislation. The monthly contributions were accumulated for individual employees by developing models based on the conditions stipulated in pension reform act 2004 amended 2014 on how pension contributions. The out come of the reform was the enactment into law of the pension reform act. Those changes will be listed when you open the content using the table of contents below. An assessment of the effectiveness of the nigerian 2004 pension. Establishment of a contributory pension scheme for employee in the public and private sectors. Amendments to employee retirement income security act of 1974 sec. Introduction captain tim baker, a pilot at us airways, inc. The pension reform act 2004 seems set to stimulate savings for the development of the domestic capital market in line with the concern of the economic blueprint of the federal government, the national economic empowerment and development strategy needs. Section 221 directs the secretary of labor, the secretary of the treasury, and the director of. The lagos state pension reform law 2007 was signed into law on 19th march 2007.
The collection of retirement benefits in nigeria have continued to cause a lot of suffering to retirees and their respective nextofkin especially the retirees in the public sector of the economy. Association of memberdirected pension schemes amps the principal body for discussing changes involved in the area of pension planning. In the next section, the pension reform act of 2004 is explored in great detail by looking at some of the provisions. In the years following the introduction of the pensions act 1995, it was widely perceived that it was failing to offer the protection to pension scheme members that had been anticipated.
Any changes that have already been made by the team appear. Consequently, the pension reform act, 2004 cannot be the subject of an amendment. Pdf the objective of this study is to highlight the differences between 2004 and 2014 pension reform act in nigeria. Nigeria new pension reform law brings change for empl. Comparison between the old and new pension scheme 58 2. Pension reform act, 2014 an act to repeal the pension reform act no. Public employee pension forfeiture act definition of crimes related to public office or public employment act of jul. This article assesses the effectiveness of the nigerian 2004 pension reform policy. Introduction pension has been a vexed issue in nigeria. Pension reform act 2014 the good, the bad and the ugly. The lagos state pension reform law lagos state pension.
Pdf pension reform act 2004 olanrewaju ajiboye academia. Pension reform act 2014 the good, the bad and the ugly pwc. The key objectives of the reform are to ensure contributors receive their benefits as and when due and to assist improvident individuals to save in order to cater for their livelihood during old age. The pension reform act, 2004 the act establishes a contributory pension scheme for payment of retirement benefits of employees of the public service of the federation, the federal capital territory and the private sector. Pension protection a comparative analysis of pension reform. I any amount payable as a retirement benefit under this act shall not be taxable. Before the enactment of the pension reform policy in 2004, the old payg and defined. The pension reform act 2004 came into force on 25 june 2004. The bill seeks to amend the pension reform act, cap p4 lfn, 2004 by providing for a definite percentage a retiree can withdraw from his retirement savings account and to generally ease withdrawals from retirement savings account. The pension reform act 2014 newsletter july 2014 1. The public sector had the pay as you go payg defined benefits, a noncontributory pension scheme which was bedeviled by many problems.
The objective of this study is to highlight the differences between 2004 and 2014 pension reform act in nigeria. Pension, reform act, 2004, implementation, federal tertiary institutions, south east states, nigeria. Pension reform act 2014 national pension commission. Before the enactment of the pension reform act 2004, pension schemes in nigeria, without prejudice to the system in place at that time, had their own share of challenges that made its management. Like the repealed act, the new pension reform act governs and regulates the administration of the contributory pension scheme for both the public and private sectors in nigeria. Any changes that have already been made by the team appear in the content and are referenced with annotations. The impact of the implementation of pension reform act 2004 on the pensioners.
Multiemployer pension plans pension benefit guaranty. The pra 2004 also paved the way for the establishment of pencom as a statutory body for the regulation and supervision of nigerias pension sector and to ensure effective administration of pension matters in nigeria. The bill has been referred to the committee on establishment and public services. Pencom in the eyes of pension reform act 2004 daily trust. History of the nigerian pension industry one of the oldest documents to discuss social support was the code of hammurability by. And for related mainers enacted by the national assembly of the federal republic of nigeria iobjectives and application t.
Most of the expert views i have read have not been very satisfactory or detailed. Enacted by the national assembly of the federal republic of nigeria. Interestingly, the pension reform policy is beginning to gain attention in the literature regarding policy learning and transfer. On 1 july 2014, president goodluck jonathan signed into law the new pension reform act 2014 which repealed the pension reform act no. Reform of funding rules for singleemployer defined benefit pension plans. It established for the public service of lagos state, a contributory pension scheme for the payment of retirement benefits of employees in the service to whom the scheme applies. Prior to the introduction of pension reform act 2004, pension schemes in nigeria were categorized into public and private sectors. It was on the account of these challenges in pension administration that the government of the federal republic of nigeria, as part of its reform agenda established a new scheme referred to as pension reform act, 2004. A critique of pension reform act, 2004 in nigeria anyim.
Modernisation and reform the south african retirement funding landscape the retirement funding system has been in place for a long time, and has an established body of legislation governing it, principallycodified in the pension funds act, promulgated in 1956. This piece highlights the salient issues in the new pension reform act 2014 which repealed the pension reform act 2004 and future of pension administration in nigeria. The new pension scheme introduced a tripartite system with three key. Comparison of chilean and nigerian mandatory pension system 60 2. The pension reform act 2014 the act was enacted by the national assembly of the federal republic of nigeria on july 1, 2014 to repeal the pension reform act no. An assessment of the effectiveness of the nigerian 2004. The pension reform act, 2004 the act establishes a contributory pension scheme for payment of retirement benefits of employees of the public service of.
The objective of the act is to create a more effective pension administration system in nigeria, to. This newsletter summarises some of the key provisions contained in the version of the act signed by the president. Implementation of the 2004 pension reform act in federal. Detailed analysis of new pension reforms act, 2004. A comparative analysis of pension reform in the united states and the united kingdom sarah d. Pension protection a comparative analysis of pension. Introduction of multiple pension schemes as is obtainable in advanced countries. Impact of contributory pension scheme on the nigerian public. The new pension reform act 2004 has generated excitement in the nigerian business community. Nigeria new pension reform law brings change nigeria new pension reform law brings change signed into law on july 1, nigerias pension reform act 2014 requires private sector employees, under certain conditions, to participate in a new compulsory contributory pension scheme.
The impact of old pension scheme on pensioners welfare 93 4. There are changes in the way pension assets are managed and benefit distributed to. The effectiveness and efficiency of the institutional framework for pension reform act 2004 in delivering pensioners welfare 95. Retirement fund reform a discussion paper december 2004. Pension and related issues had received significant attention in many countries over the recent past decades. The last section compares the old and the new pension scheme. The pension reform programme is governed by the key principles of sustainability, safety and security of benefits, transparency, accountability, equality, flexibility, inclusively, uniformity and. Multiemployer pension plans report to congress required by the pension protection act of 2006. The pra 2014, which repeals the pension reform act no 2 of 2004, governs and regulates the administration of the contributory pension scheme the scheme in nigeria. As it applies to the reform process in europe, pension reform in nigeria, which is codified in the pension reform act 2004, was also rationalized by arguments of rising pension liabilities and inability to finance prior commitments, as well as the need to make the pension system more sustainable in terms of a move towards a greater role for a privately managed funded system and the conversion. House of representatives passed the pension reform bill 2014, president goodluck jonathan signed the bill into law recently. Pension reform act 2014 key highlights and salient points.