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Lagos, Nigeria – In a recent interactive session on the Contributory Pension Scheme (CPS) for the Organised Private Sector, the National Pension Commission (PenCom) revealed an exciting development for retirees under the CPS. Retirees have the opportunity to receive up to 50 percent of their pension fund as a lump sum upon retirement.

This announcement was made during the PenCom/Nigeria Employers’ Consultative Association (NECA) Interactive Session, which took place in Lagos. Mr. Obiora Ibeziako, the Head of the Benefits and Insurance Department at PenCom, presented a paper on “Retirement Benefits Administration under the CPS.”

According to Mr. Ibeziako, there are two main modes for retirees to access their Retirement Savings Account (RSA): Programmed Withdrawal (PW) plus lump sum and Annuity plus lump sum. To process payment, the Pension Fund Administration (PFA) is responsible for calculating the monthly or quarterly pension and the lump sum from the retiree’s RSA balance. This is done using the Standard Retirement Benefits Computation (SRBC) Template provided by PenCom. The template serves as a guide for RSA holders to choose their preferred mode of payment.

Mr. Ibeziako explained, “Where the RSA balance is sufficient for the Programmed Withdrawal (PW) or Annuity option, the monthly or quarterly pension or annuity shall be at least 50 percent of the final salary based on the Annual Total Emolument (ATE) as at the date of retirement.”

In cases where the RSA balance falls short of providing 50% of the retiree’s ATE as a monthly or quarterly pension, the retiree will be entitled to a concessionary Regulatory Lumpsum of 25% of the RSA balance. Furthermore, if the RSA balance cannot provide a monthly or quarterly pension or annuity of at least one-third of the prevailing minimum wage, the retiree will have the option to withdraw the entire balance in the RSA en bloc.

Mr. Ibeziako also highlighted that additional remittances will first be applied to augment the pension up to 50% of the retiree’s final salary, with the remaining balance available as a lump sum. In cases where the retiree’s pension already reaches 50% of the final salary, any additional remittances can be collected as a lump sum.

Additionally, Mr. Ibeziako assured retirees that there would be periodic pension enhancements for those on Programmed Withdrawal, based on the Return on Investment of funds in the RSA.

This development provides retirees with flexibility and financial security, allowing them to choose a payment option that best suits their retirement needs. It is a significant step toward ensuring a comfortable retirement for those participating in the Contributory Pension Scheme.

The interactive session held by PenCom and NECA was a valuable opportunity to disseminate this information and promote an understanding of the options available to retirees under the CPS.

For more information and detailed guidelines on accessing the 50% lump sum option and other retirement benefits under the CPS, retirees are encouraged to consult their Pension Fund Administrators (PFA) and stay updated with the latest information from the National Pension Commission.

As Nigeria’s pension landscape continues to evolve, retirees can look forward to a more secure and flexible retirement experience.


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