For decades, a growing number of Nigerians have trusted their financial future in the hands of pension fund administrators (PFAs), and in this article, we will be listing the top 7 pension companies in Nigeria, serving as custodians of retirement funds.
With this list, hopefully, you – if you are in the market for a PFA – will make an informed decision and choose a pension plan that satisfies your need.
Pension plans are important and sometimes made compulsory, for employees of organisations, deducting a certain amount of money from their wages on a monthly basis, channelled towards retirement.
Nigeria has a total of 22 PFAs, and data contained in the Pension Asset Summary Report stated that there were over 9 million Retirement Savings Accounts (RSAs) in the country, rising by 189,765 accounts, representing a 2.01 percent increase.
Pension in Nigeria remains a hard product to sell, seeing as most Nigerians are not properly educated on the subject of pension, with a 12 percent penetration.
Added with the inadequate amount of pension education available to Nigerians, especially those in the informal economy who make up most of the workforce in Nigeria, there’s also the factor of low earnings, discouraging many from giving audience to the idea of a pension plan.
According to a report by the National Pension Commission (PenCom), the age group with the highest number of RSA registrations are between 30-39 years with 3,050,342, representing 36.27 percent.
The age group with the least RSA registrations are those above 65 years with 224,258, representing 2.67 percent.
The Federal Government introduced the Contributory Pension Scheme (CPS) in 2004 to aid the easy onboarding of Nigerians on pension plans for a secure retirement, with stipulations that make the scheme compulsory.
Now, let us identify, in no order, the top 7 Pension Fund Administrators in Nigeria.
READ ALSO:How Burden Of Black Taxes Can Be Lifted With Pension
Stanbic IBTC Pension Managers
One of the forerunners of PFAs in Nigeria, Stanbic IBTC Pension Managers, was established in 2004 and is a subsidiary of Stanbic IBTC Holdings Plc. It provides pension services to employees in both the private and public sectors.
It has continued to prop itself as a trusted name in the pension field, with over 1.8 million pension subscribers, the largest in the country.
Sigma Pensions
The establishment of Sigma Pensions came a year after the creation of the Contributory Pension Scheme (PCS) in 2004, and it boasts of over 780,000 pension contributors and prides itself as one of Nigeria’s leading pension fund administrators.
Tangerine Pensions
Formerly known as AXA Mansard Pensions Limited and established in 2006, Tangerine Pensions is one of Nigeria’s leading Pension Fund Administrators and Asset Management Companies.
It offers an assortment of pension services including pension advisory services, pension fund management.
The pension firm was established in 2004 and is owned by a consortium of companies inlcuding Custodian Trustees Limited, Custodian Investment Plc., Sterling Asset Management Ltd., Ideal Insurance Brokers Limited, and WSTC Financial Services Limited.
The PFA offers services like Retirement Savings Accounts (RSAs), Gratuity and Legacy Funds, among others, with an authorised share capital of over N2 billion.
Fidelity Pension Managers Limited
Formerly known as Alliance Management limited, until its name was changed in 2007 to its current name, the pension manager is fully licenced by the National Pension Commission (PenCom).
It has a paid-up share capital of over N2 billion and provides a bouquet of pension services.
Pal Pensions
Birthed by the merging of two firms, institutions, African Alliance Insurance Company Limited and FSDH Merchant Bank (formerly First Securities Discount House Limited (FSDH)), the pension firm has more than 450,000 clients over a 13-year period, with a solid experience in the matters of pension.
AIICO Pension Managers Limited
One of the pioneers of pension administrators in the country, AIICO – incorporated in 2005 – has an array of services in the areas of pension administration, banking, risk management, asset management, and capital market.
If you want to be guided through the maze of the pension world to help in your decision-making on how to choose a pension fund administrator (PFA) and the best pension option best suited to you, join BizWatch Nigeria in the third installment of its webinar series with the theme, ‘Reimagining Retirement For Secured Future.’
The webinar is slated to hold on Wednesday 29 September 2021 at 11 am.
Kindness Udoh is a writer and media enthusiast with vast experience in journalism, copywriting, and features across beats. He also has professional certifications in creative writing. You can reach him via [emailprotected]
There are currently seven (7) CPFAs in Nigeria. National Pension Commission (PenCom): This is the regulatory body that supervises and ensures the effective administration of all pension matters in Nigeria.
A Pension Fund Administrator (PFA) is a company licensed by the National Pension Commission to manage and invest the pension funds in the employee's Retirement Savings Account (RSA).
Japan's GPIF remains the largest pension fund in the world for the 20th straight year. The 300 largest pension funds in the world saw their assets under management increase by 8.9% to a record $23.6 trillion in 2021, according to a report from WTW's Thinking Ahead Institute.
The minimum contribution under the Act is 18% of monthly emolument (with a minimum contribution of 10% by the employer and 8% by the employee). If the employer decides to bear all the contribution, the minimum contribution is 20% of monthly emolument.
WHAT IS A RETIREMENT SAVINGS ACCOUNT (RSA)? This is a pension account maintained with a Pension Fund Administrator (PFA) into which monthly contributions of employer and employee are paid. The RSA is defined by a unique Personal Identification Number (PIN) issued by the National Pension Commission (PenCom).
It stipulates the payment of retirement benefit to employees to whom the scheme applies, which comprises every public sector employee and private sector employees in a firm with staff strength in excess of five employees.
The Pension Reform Act 2004 established the National Pension Commission (PenCom) as the body to regulate, supervise and ensure the effective administration of pension matters in Nigeria.
An Act to provide for the establishment of an Authority to promote old age income security by establishing, developing and regulating pension funds, to protect the interests of subscribers to schemes of pension funds and for matters connected therewith or incidental thereto.
Iceland has the best pension system in the world, according to the Mercer CFA Institute Global Pension Index for 2021 — a global study that shines a light on how nations are preparing their aging populations for retirement.
Pension funds are made up of a portfolio of assets in which your pension contributions are invested, such as stocks and shares, bonds, cash and commercial property. You can receive a pension from three different sources: the state, personal pensions that you've set up yourself, and workplace pensions from employers.
Pension Reform Act 2014 is the most current and principal law on pensions in Nigeria. It has exactly four objectives as contained in Sections 1(a) to (d) of the Act. In the past, it was common in Nigeria for companies to have divergent standards for administration and payment of retirement benefits for employees.
Average Salary * Pensionable Service / 70 where, Average Salary means the average of the Basic Salary + DA combined, drawn in the last 12 months, and. Pensionable Service means the number of years worked in the organized sector after 15th November, 1995.
W.e.f 1.1.2006, Pension is calculated with reference to emoluments (i.e.last basic pay) or average emoluments (i.e. average of the basic pay drawn during the last 10 months of the service) whichever is more beneficial. The amount of pension is 50% of the emoluments or average emoluments whichever is beneficial.
Stanbic IBTC Pension is the best performing PFA with about 11.93% returns and N1 billion paid up capital. Incorporated in 2004, Stanbic IBTC Pension Managers is a subsidiary of Stambic IBTC Bank. Over the years, it has proven prudence in management of customers funds.
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.
National Provident Fund (NPF) was the first formal pension scheme in Nigeria established in 1961 for the non-pensionable private sector employees. The first Pension Reform Act of 102 was introduced by the Federal Government in 1979 [14].
contribution rates for employers and employees, where the minimum for a qualifying pension scheme in 2022/23 is 8% total contributions (including tax relief) on relevant earnings, of which at least 3% is from the employer.
Pension payments are made for the rest of your life, no matter how long you live, and can possibly continue after death with your spouse. Lump-sum payments give you more control over your money, allowing you the flexibility of spending it or investing it when and how you see fit.
A personal pension is a type of pension you can set up yourself, and is common amongst the self-employed. Personal pensions include the Self Invested Personal Pension (SIPP). There's no limit to the number of personal pensions you can set up, and you can pay into more than one personal pension at a time.
The main functions of the PFA are to open Retirement Savings Account (RSA) for employees; invest and manage pension fund assets; payment of retirement benefits and accounting for all transactions relating to the pension funds under their management.
You can simply write, “Please, find attached.” or its abbreviated form: PFA. ✅ “Attached” is the correct word for electronic communications. Enclosed is used for physical mails where envelopes are used. Don't get confused.
The Pension Fund Regulatory & Development Authority Act was passed on 19th September, 2013 and the same was notified on 1st February, 2014. PFRDA is regulating NPS, subscribed by employees of Govt. of India, State Governments and by employees of private institutions/organizations & unorganized sectors.
Promote, Regulate, and Develop pension funds. Tier-I and Tier-II of the National Pension Scheme is governed under the PFRDA. To promote the purchase of pension schemes in order to cater to senior citizen's financial needs. PFRDA helps in educating the citizens about the importance of pensions in old ...
NPS provides you two types of accounts: Tier I and Tier II. Tier I is mandatory retirement account, whereas Tier II is a voluntary saving Account associated with your PRAN.
- Before a Government servant gives notice of voluntary retirement with reference to Rule 48-A, of CCS(Pension) Rules 1972 he should satisfy himself by means of a reference to the appropriate administrative authority that he has, in fact, completed twenty years' service qualifying for pension.
A workplace pension scheme is a way of saving for your retirement through contributions deducted direct from your wages. Your employer may also make contributions to your pension through the scheme. If you are eligible for automatic enrolment, your employer has to make contributions into the scheme.
The Chairperson of the Committee, Dr.Surendra A.Dave, former Chairman of Unit Trust of India, and the members of the Committee have done well to have produced the Report of the first phase of Project OASIS in a short time-frame.
A New Pension Scheme (Contribution-based pension scheme) now called National Pension System (NPS), is now in place for central government employees since 2003. NPS was made mandatory for all new recruits to the central government service (except the armed forces) from 1 January, 2004.
Applicant should be minimum graduate in any discipline and should possess a valid certification on retirement planning or retirement advisory services issued by National Institute of Securities Market (NISM). For more details on the certification, individual may visit NISM website www.nism.ac.in.
The Pension Fund Regulatory and Development Authority (Exits and Withdrawals Under the National Pension System) Regulations, 2015 were published in the Gazette of India on 11th May, 2015 vide No.
The main functions of the PFA are to open Retirement Savings Account (RSA) for employees; invest and manage pension fund assets; payment of retirement benefits and accounting for all transactions relating to the pension funds under their management.
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