What happens to the retirement benefits of an employee who is already under a pension scheme existing before the commencement of the Pension Reform Act 2004?
Employee’s right to accrued pension for past service is guaranteed by the Act. In the case of the Public Service of the Federation and Federal Capital Territory where the Scheme is unfunded, the right shall be acknowledged through a Federal Government Retirement Bond which shall be redeemed upon the retirement of the employee. In anticipation of the redemption of the Bond, the Federal Government shall establish a Retirement Benefits Bond Redemption Fund at the Central Bank of Nigeria into which it shall pay 5% of the total monthly wage payable to its employees on a monthly basis. However, in the case of funded schemes and the private sector, employers shall credit the Retirements Savings Accounts of its employees with any funds to which each employee is entitled to and in the event of deficiency, the shortfall shall become a debt and treated with same priority as salaries owed. The employer shall also issue a written acknowledgement of the debt and take steps to meet the shortfall.
