I understand the National Assembly are looking at amending the current Pension Reform Act 2004 which currently guides the way pension funds operate in Nigeria. Whilst this may not immediately concern some of us it is important to note the following amendment which certainly will affect our pockets.
See them below;
- The scheme will be applicable to employers with 3 or more employees (currently 5 or more); This will affect a lot more small businesses and potentially startups which typically have about 3 employees (e.g Owner, Secretary, Driver).
- The total rate of contribution is 20% (currently 15%) of monthly emolument with a minimum of 12% (currently 7.5%) by the employer and a minimum of 8% by the employee (currently 7.5%); The additional 5% rise will increase the personnel cost of organisations. Employees will also have to part with o.5% more of their Basic, Housing and Transport Allowance Combined.
- Basis of monthly contribution to be total emoluments as may be defined in the employee’s contract of employment but shall not be less than a total sum of basic salary, housing allowance and transport allowance (currently, monthly emolument means a total sum of basic salary, housing allowance and transport allowance). This just clarifies the definition of Total Emoluments
You can get a copy of the bill here
Thanks to Taiwo Oyedele of PWC for this scoop. You should follow his blog Nigeria Tax Blog