What happens to the retirement benefits under the pension scheme existing before the commencement of the Pension Act?
- In the case of the Federal Public Service and the FCT where the previous scheme was unfunded, the government will calculate the amount due to each employee and issue a Federal Government Retirement Bond to the employee. The employee shall hold this bond as evidence of government liability. Upon retirement the bond shall be redeemed by the Central Bank of Nigeria (CBN). The proceeds shall be transferred to the credit of the Retirement Savings Account of the employee.
- For employees in self-funded Agencies, the employer shall credit their RSA with any funds to which the employee is entitled from prior schemes. If the funds are not sufficient to meet the accrued liabilities to the employee, the employer shall issue to the employee a written obligation on the liabilities, and the obligation shall have the same priority as salary. The terms of repayment of such obligations shall be agreed with the employee.
- For private sector employees, the employer shall credit their RSAs with any funds to which the employee is entitled. In the event that the funds are not sufficient to meet the accrued liabilities, a written obligation to that effect shall be issued to the concerned employee and the terms of such obligation shall be agreed with the employee.