The Contributory Pension Scheme (CPS) since its inception in 2004 has introduced a lot of innovations into the Nigerian pension industry space. Unlike the old DB scheme, the pension contributor is in control of his or her contributions and can do a lot in terms of making sure that before retirement comes, his pension issues or worries are resolved.
As a matter of fact, the young contributor needs to keep twice as much tab on his or her pension contributions as would a retired contributor or pensioner. This is because, as an active contributor, there are ways of correcting any form of mistakes or deliberate sharp play often experienced by pension contributors. Such sharp play can be the non-remittances of pension contributions duly deducted by some employers. There are also cases of mistakes being made on the part of the pension administrators which could be corrected earlier if detected.
To keep tab on your pension contributions and ensuring that you put in place all that is necessary to have a smooth and problem-free retirement, the following actions need to be taken:
1. Ensuring that RSA statements are received regularly:
A pension contributor is entitled to receive his or her RSA statements quarterly from his or her PFA. The RSA statement outlines the RSA balance to his or her credit. It shows how the monthly contributions are made on a month on month basis divided into the employer, employee and voluntary contribution (if any) portion. The RSA statements also summarises the growth on the account from inception to date. At a glance, the contributor can see the balance in his account which represents the amount he or she will receive if he or she retires at that moment. The RSA balance is expected to grow on month on month basis although this is dependent on some other factors. However, generally the RSA balance will grow over time.
2. Reviewing the RSA statements critically:
As a contributor, it is expected that you review your RSA statements received to check for any missing contributions or under remittances by your employer. By reviewing your statement, you can also see how your PFA has managed your pension contributions as this affects the growth or otherwise of your RSA balance. It is important to note that if you discover any non-remittance of pension contribution or under-remittances, you should contact your employer to find out what the problem is. If your employer does claim that the fault is not from them, then you should contact your PFA to verify this claim. Otherwise, you should report to the National Pension Commission immediately.
3. Make sure you do not open more than one RSA:
A lot of times it has been found out that some contributors usually open RSA with more than one PFA. Perhaps this is due to ignorance on their part. It will be difficult to monitor your RSA especially if contributions have been made into these RSAs on your behalf by your employer. Although it is not supposed to be possible to have more than one RSA Personal Identification Number (PIN) but it does. In practice, the PFA who registered you first and issued you your first RSA PIN is expected to be your true PFA. Therefore, you should make all necessary corrections to consolidate your contributions in other RSA account (if any) into your true RSA.
An individual is required to have only one RSA in a lifetime under the CPS. Therefore, opening more than one RSA will only cause problem for the contributor now and in the future if not detected now. However, with PenCom improved Enhanced Contributor Registration System (ECRS) this is now being curtailed. It is now expected that after every contributor has updated their records in the on-going Data Recapture exercise with their PFAs, this issue will be totally resolved by eliminating all present double RSA registrations and preventing any further reoccurrence of such.
4. Verify that your employer has an active Group Life Insurance Package for you:
Section 5 and 6 of the PRA 2014 makes it compulsory for employers to have a Group Life Insurance package that is 3 times the annual emoluments of their employees. The Group Life Insurance covers death compensation while the worker is still with the employer. As an employee under the CPS, it is your duty to verify if this is put in place by your employer failure of which is a violation of the PRA 2014 by the employer. Such case should be reported to the Commission who should compel such employer to do what is required.