On June 25, 2004, President Olusegun Obasanjo signed the Pension Reform Bill into law. The main aim of the law is to ensure that employees save towards retirement and that every Federal/Public and Private sector employee receives their retirement benefits as and when due.

The law establishes a mandatory  funded contributory Pension scheme based on Individual Retirement Accounts for all Federal and Private Sector employees. It covers all private sector organizations with five (5) or more employees to make a minimum contribution of 15% of the emoluments (Annual Basic Salary, Transport and Housing Allowance) to the RSA’s of each staff.