Pensions Act pegs fund drawing age at 50
CONTRIBUTORS to the new pensions scheme who retire before they have attained 50 years may not be allowed to draw on the funds, as the Act pegs the drawing age at 50.
Section 3(1) of the Act provides that "no person shall be entitled to make withdrawal from the retirement accounts before the age of 50 years.
With the coming into effect of the act, President Olusegun Obasanjo also recently inaugurated the National Pensions Commission to administer the scheme.
The scheme, which came into effect recently when the Pensions Reform Bill was signed into law by the President, is applicable to all employees in the public and private sectors nationwide.
But there are a few exception to this provision, as is stipulated in subsection two.
Under the subsection, an employee who has been certified mentally and physically incapable of performing his job could retire from service and withdraw from his retirement benefits before he attains the age of 50, provided that a medical certificate is given on the advice of a qualified physician or a properly constituted medical board.
It is also specified that employees who have three or less years to retire before the commencement of the Act are exempted from the contributory pensions scheme.
These categories of workers, it noted, would draw from the existing retirement benefits established by their organisations before the Act came into effect.
To benefit from the pensions scheme, a worker is expected to contribute a minimum of 15 per cent of his monthly emolument to the scheme.
A minimum of 7.5 per cent of this amount would be contributed by the employee, while his employer would contribute the 7.5 per cent balance.
"In the case of the military, a minimum of 12.5 per cent would be contributed by the employer while the employees would contribute a minimum of 2.5 per cent," the Act said.
The commission, which was inaugurated this week, will have four full-time commissioners and part-time members.
It was charged with the responsibilities of regulating, supervising and ensuring the effective administration.
It would be headed by a part-time chairman and a director-general.
The DG, who is the chief executive officer will be responsible for the day-to-day running of the commission.
The commission's part-time members will be selected by the Head of Service of the Federation, the Ministry of Finance and the Nigeria Union of Pensioners, Nigeria Employers Consultative Assembly, Central Bank of Nigeria (CBN) and Security and Exchange Commission (SEC), will also serve as members of the commission.
According to the Act, the commission will have four specialised departments to be headed by a commissioner. They are the technical, administration, inspectorate, finance and investment departments.
Other functions of the commission as specified in the Act, include issuing guidelines for the investment of pensions fund.
The commission will also approve license, regulate and supervise pensions fund administrators and establish guidelines for the management of pensions fund.
It is expected to maintain a national data bank on pensions matter and embark on public awareness campaigns.
