Investigating the limits of the Pension Reform Act

Abstract

Recently, the Pension Reform Act (the Act) came into force in Nigeria.  The Act established a compulsory contributory pension scheme in Nigeria.  The applicability of the Act is however restricted to organisations that employ up to five persons. Prior to the Act, while there was a broad regulatory framework that established a pension scheme for public sector employees, there was no comprehensive regulatory framework governing either the establishment or the administration of pension schemes in Nigeria.  However, there were sector specific attempts to regulate retirement benefit schemes from a tax perspective by the tax authorities and from an investor protection perspective by the Securities and Exchange Commission (SEC).  This article reviews the key provisions of the Act, and, thereafter, discuss the structure and nature of retirement benefit schemes that existed (and still exist) in Nigeria prior to the enactment of the Act.