ARE you an architect, lawyer, actor, musician, business-man, trader, caterer, electrician, carpenter, cab driver, or a commercial motor cyclist? If yes, you will soon have an opportunity to save for your future under the Contributory Pension Scheme (CPS), courtesy of the Federal Government.

How? The government through the National Pension Commission is planning to release a micro pension scheme that will enable self-employed persons and the informal sector to join the CPS. At present, the guidelines for the new scheme are being finalised preparatory to the take off of the micro scheme.

The CPS, designed for the public and private sectors, was established under the Pension Reform Act 2004, which was repealed and replaced with the Pension Reform Act 2014, in 2014. Section 4 of the Act provides for a mandatory minimum contribution of eight and 10 per cent of employee’s monthly emolument by the employer and employee. Each employee is expected to open a Retirement Savings Account (RSAs) into which the contributions are to be paid, with a Pension Fund Administrator (PFA) licensed by the National Pension Commission (PenCom), established under section 17 of the Act, to regulate and supervise pension schemes in the country. The PFA is to manage and invest the fund in the RSA, from where a contributor will draw benefits on retirement in line with the provisions of the Act.

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