The law establishes a mandatory funded contributory Pension scheme based on Individual Retirement Accounts

for all Federal and Private Sector employees. The PRA 2014 has revised the rate of pension contribution (from

7.5% contributed equally by the employer and employee under the old law) to 8% for the employee and 10% for

the employer; bringing the minimum total contributions for both parties to 18% compared to 15% previously. As

contained in the 2004 legislation, an employer may choose to make the total mandatory contributions

without making deductions from the salary of the employee; however, total remittance for any employer who

chooses to remit without recourse to the employee must not be less than 20% of the monthly emolument of the employee.

The intent of the Act is to dispense with the un-funded, defined-benefit pension scheme prevalent in the public sector and

establish a fully defined contribution scheme for all employees in the Public and Private sectors. 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 Retirement savings Account (RSA) of each

staff. Such contributions are to be paid into account of the pension Fund Administrator(s) (PFAs) selected by the individual

staff with the Pension Fund Custodian (PFCs) nominated by the PFA.

The reform has created new opportunities in these two service areas from Pensions of both Federal/public sector and the

Private Sector employees as well as of various state Governments, who though not mandated under the law, have since

initiated the process of enabling similar laws.