Guidelines setting out rules for making voluntary contributions (VCs) to Nigeria’s contributory pension scheme — in addition to statutory employee and employer contributions — were published in October 2018 by the pension authority PENCOM and took effect immediately. The guidelines accompany PENCOM’s 2017 circular about the administration of VCs and aim to clarify certain provisions and curb tax evasion.
The Pension Reform Act requires that private and public sector employees in organizations with three or more employees must participate in a contributory pension scheme (CPS). Most employees in the private sector can make VCs, but there’s no option to allow employers to do so.
Key provisions of the guidelines include the following: