Pension funds are investment pools contributed monthly by employers and employees towards the workers’ retirements. They are compulsory for corporations and all levels of government and are required by law.  

In Nigeria, the minimum rate of pension fund contributions is 18% of the employee’s monthly salary where 10% is contributed by the employer and 8% is contributed by the employee. This is known as a defined contribution scheme or the contributory pension scheme and in some cases the employer can decide to pay all 18% of the employee’s salary or even more than the minimum rate, the funds are invested by the financial corporations handling them and given to the employer at retirement. Employees can also decide to invest extra into their pension funds through the voluntary contribution scheme and this can be withdrawn before retirement or attainment of 50 years of age.


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