ACCESSING RETIREMENT SAVINGS ACCOUNT IN THE NEW CONTRIBUTORY PENSION

INTRODUCTION Accessing : this can be defined as a way of entering or reaching a place, the opportunity or right to use something or see somebody i.e an access to confidential information. What is retirement? Retirement is getting rest after a work life. How does one then have rest without adequately preparing towards it? This is why government makes it a point of duty to ensuring that, after a man might have worked and earned income for a certain number of years and rests; he should be getting stipend (pension) to keep body and soul together. Also to make him feel like he is getting reward after service. RSA The Retirement Savings Account of the worker under the new scheme is operated like a bank account, in which the worker gets an update on his account balance (RSA) regularly, thus enabling him to know how much he is entitled to, even before he retires. HISTORICAL OVERVIEW •Nigeria operated Defined Benefit Scheme (DBS) between January 1, 1946 and June 2004. •The Pension Reform Act was enacted on 25th June and came into effect on 1st July 2004. •Reform established a Defined Contributory Scheme (DCS) as against the erstwhile DBS so as to solve pension crisis before DCS. VARIOUS WAYS OF ACCESSMENT As elucidated above, that accessment could be to see or to use. Hence, viewing the RSA can be done on • Phone • Internet • Statement of account from PFA COMPOSITION OF RSA A total of I5% contribution from both employee and employer Employee 7.5% Employer 7.5% QUALIFICATION FOR ACCESSING RSA (i.e to make use of the balance) An employee may access his/her RSA when he/she ceases to make further contributions into the RSA as a result of mandatory retirement, compulsory retirement, retirement on medical grounds, and death. GROUNDS FOR WITHDRAWAL 1. Mandatory Retirement Mandatory retirement occurs when an employee disengages from active service at the retirement age or completion of the length of 35 years of service or age 60/65 years. 2. Compulsory Retirement Compulsory retirement occurs when an employee disengages from active service in accordance with the terms and conditions of service, before attaining the age of 50 years. Requirements i) A letter of notification of retirement issued by his/her employer. ii) A document confirming that the retirement is in accordance with terms and conditions of his/her employment. iii) Pay slip or evidence of total annual remuneration. iv) Evidence of any accrued pension rights/acknowledgement of indebtedness (for an employee in the private sector) as well as any outstanding pension contribution. 3. Retirement on Medical Grounds Retirement on medical grounds occurs when an employee disengages from active service based on the advice of a suitably qualified physician or medical board certifying that the employee is no longer mentally or physically capable of carrying out the functions of his/her office. This could also be due to total or permanent disability either of mind or body. Requirements i) A medical certificate issued by a properly constituted Medical Board or a suitably qualified physician. ii) The letter of notification of retirement issued by his/her employer also authenticating the medical certificate. iii) Pay slip or evidence of total annual remuneration. iv) Evidence of any accrued pension rights/acknowledgement of indebtedness (for an employee in the private sector). v) Official notice of retirement. 4. Missing Persons The employer and/or Next-of-Kin shall notify the PFA of the disappearance of the employee/retiree after a minimum period of 12 months. Requirements from Next-of-Kin In addition to providing an acceptable means of identification (e.g. current International Traveling Passport, National Identity Card or letter of confirmation of identity from his/her bank or Notary Public), the next-of-kin will provide the following: i) A Police Report confirming that the person has been missing with effect from the reported date, the circumstance of the disappearance and that the person has not been found after 12 months. ii) Letter of confirmation of disappearance from the employer (if in active employment at the time of disappearance) also bearing the passport photograph of the missing person. iii) Newspaper publication announcing the disappearance of the person. NOTE: Disengagement from service. The other means, allowed by law, under which a worker may access a maximum of 25 per cent of the balance standing to his RSA, is if he loses his job before the age of 50, and does not get another job within six months. 5. Death The employer or Next-of-Kin or the representative of the deceased shall notify thepensions Office of the death of the employee/retiree. Requirements from Next-of-kin In addition to providing an acceptable means of identification (e.g. current International Traveling Passport, National Identity Card or letter of confirmation of identity from his/her bank or Notary Public), the next-of-kin will provide the following: 1. Letter of Administration or Will admitted to Probate 2. Certificate of Death/Cause of Death 3. Certificate of Registration of Death 4. Police Report (if death is by accident) 5. Burial Warrant issued by a Local Government Council 6. Evidence of Death/Burial issued by an Islamic Community Head or Judge of a Sharia Court. 7. Evidence of Death/Burial issued by a Leader of a registered church. 8. Copy of obituary poster (if any) Modes of withdrawal • Programmed Withdrawal Programmed withdrawal is an option that is calculated on an expected life span; meaning that the pensioner will be paid on a regular basis for a fixed number of years, after which he ceases to earn any further income from his PFA again. • Annuity Annuity is provided by the insurance companies. Also, the Act specifies that the annuity will be paid on a regular basis by the insurance company to the pensioner until he dies. Relevant Document to Keep • Letter of Appointment • Birth Certificate/Sworn Affidavit • Letter of Confirmation • Passport Photography • Promotion Letters • Identification Card • Pay-slips as at July 2004