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AGENDA

RETIRING UNDER THE NEW PENSION SCHEME by National Pension Commission (PenCom) Plot 174, Adetokunbo Ademola Crescent, Wuse II P.M.B. 5170, Wuse, Abuja Tel.: +234-9-4138736-40 www.pencom.gov.ng. AGENDA. Gratuity & Pension Under the Old Scheme.

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AGENDA

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  1. RETIRING UNDER THE NEW PENSION SCHEMEbyNational Pension Commission (PenCom)Plot 174, Adetokunbo Ademola Crescent, Wuse IIP.M.B. 5170, Wuse, AbujaTel.: +234-9-4138736-40www.pencom.gov.ng FG Retirement Bonds

  2. AGENDA • Gratuity & Pension Under the Old Scheme. • Retirement Benefits Defined under the new Dispensation. • Lump Sum & Periodic Payments. • The Old and the New Compared. • Features of the Fed. Govt. Retirement Bond. • Duties and Responsibilities of Retiree, PFAs, CBN and PenCom. • Conclusion. FG Retirement Bonds

  3. GRATUITY & PENSION UNDER THE OLD SCHEME • Accrued Retirement Benefits (Gratuity & Pension) up to June 30, 2004 recognized • Contractual Obligation of Payment of Gratuity and Pension Preserved Up to June 30, 2004. • Obligations backed by regular Funding by the FGN. • 5% of Monthly Wage Bill set aside at the Central Bank Of Nigeria. FG Retirement Bonds

  4. RETIREMENT BENEFITS DEFINED • Accrued Pension & Gratuity up to June 30, 2004 (and 5% Income) Plus • Employee 71/2% Monthly Contribution (and Income thereto) Plus • 71/2% Employer Monthly contribution (and Income thereto) Equals • Retirement Savings Account (RSA) Balance ARB(+5%) + Employee & Employer Contribution (+Investment Income) = RSA Balance FG Retirement Bonds

  5. LUMP SUM & PERIODIC PAYMENTS • Option of Programmed Withdrawal and Annuity Purchase • Differences Between Programmed Withdrawal and Annuity • Lump Sum Withdrawal at Exit (Subject to balance of 50% annual remuneration) • Monthly/Quarterly Pension Payments • Right to Change to another PFA in case of Programmed withdrawal • Right to Switch to Annuity from Programmed Withdrawal FG Retirement Bonds

  6. DEFUNCT DEFINED SCHEME Dependant on Budget allocation Gratuity & Pension 3. Periodic payment - monthly 4. Guarantee 5 yrs 5. No regulation DEFINED CONTRIBUTORY SCHEME Fully Funded- deduction at source Lump sum withdrawal from balance on RSA Monthly or quarterly payment Guaranteed for life, balance paid to NOK Supervised and Regulated THE OLD AND THE NEW COMPARED FG Retirement Bonds

  7. FEATURES OF THE FED. GOVT. RETIREMENT BOND • Carry a fixed coupon rate of 5% • It is non- tradeable and non-negotiable • Redeemable only at the end of month of retirement • Exempted from taxes • Certificated FG Retirement Bonds

  8. Specimen of the Bond NON-TRADABLE NON-NEGOTIABLE APPENDIX 1 00000000001 FEDERAL GOVERNMENT OF NIGERIA FEDERAL GOVERNMENT RETIREMENT BOND Issue Date: Maturity Date: This is to certify the Federal Government of Nigeria acknowledges that……………………… ……………………. Whose (Surname) (First) (Middle) PenCom Personal Identification Number (PIN) is ………….is entitled to the sum of N ……… only (……………………… ………………….) being his/her Accrued Retirement Benefit as at 30th June 2004 issued as a Federal Government Bond at a fixed coupon rate of 5%. The Bond shall be redeemed on behalf of the Federal government of Nigeria by the Central Bank of Nigeria upon retirement of the holder on………… ______________________ ______________________ Authorised Signatory Authorised Signatory FG Retirement Bonds

  9. Issuance and Custody of the Bond Certificates • Completion of the FG Retirement Bond Form and the physical enrollment entitles retirees to his/her Retirement Bond • CBN to act as Issuing Agent and Registrar • DMO to act as Issuer on behalf of government • Original copy of the Federal Government Retirement Bond Certificate shall be retained by PenCom while two certified true copies shall be issued to PFAs and beneficiaries respectively FG Retirement Bonds

  10. Redemption of the Bond • PFA to be notified within 6 months prior to retirement • Provide the official notice of retirement, not later than three (3) months to the expected date of retirement and his/her last payslip or any other evidence of total annual remuneration • Each bond would be converted to cash at the end of the month of retirement for instance: • Due to retire 13th Sept 2007, the bond would be redeemed on the 30th Sept. 2007 FG Retirement Bonds

  11. DUTIES AND RESPONSIBILITIES • Retiree - Opens Retirement Savings Account (RSA) - Register for the Issuance of Fed Govt Retirement Bond - Informs PFA of Retirement Date - Agree mode of withdrawal with PFA - Harmonize record of beneficiary, NOK or executor with PFA in case of death • PFAs - Compiles necessary documentations - Seeks National Data Bank Approval for Exit - apply for Bond redemption • CBN - Redeems Federal Government Retirement Bond • PenCom - Ensure that a Retiree is promptly paid Retirement Benefits FG Retirement Bonds

  12. Conclusion • Outlined the procedure for Retirement under the new dispensation • Defined what constitute Retirement Benefit • Stated the various ways in which pension payments would be effected • Stated process of issuing, custody and redemption of the bond • Discussed Responsibilities of Retiree, PFA, CBN and PenCom in ensuring that each worker would have a reasonable retirement life FG Retirement Bonds

  13. THANK YOU FOR LISTENING FG Retirement Bonds

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